Zenith Investment Research has placed a recommended rating on two new absolute return funds, AQR Delta and the JANA Triplepoint.
The funds are being managed by AQR Capital Management and JANA Investment Advisers respectively. The funds are multi-strategy absolute return products with different investment approaches.
The AQR Delta Fund offers investors exposure to a diversified portfolio of hedge fund betas across a broad range of hedge fund sectors. Its objective is to achieve a Sharpe ratio of at least 0.8 over a complete market cycle, with a low correlation to traditional asset class returns. The fund aims to target a volatility that is comparable to hedge fund indices with historical averages of about 6 per cent.
In contrast, the JANA Triplepoint fund invests in three separate investment streams: alpha, which is sought by investing in high quality and liquid hedge fund managers; alternative beta, which denotes common hedge fund exposures and strategies that can be replicated without incurring fees; and efficient beta, which is traditional market exposures to stocks, bonds, credit and real estate. Its investment objective is to outperform the UBS Australia Bank Bill Index by 5 per cent each year over rolling four-year periods with a standard deviation of 6 per cent a year.
Both funds have been assigned a recommended rating by Zenith based on its strong view of the key investment professionals of both funds. James Tsinidis, investment analyst at Zenith Investment Partners, commented: “While JANA and AQR employ markedly different investment approaches and philosophies in the management of their funds, both seek to address some of the structural issues that have troubled the hedge fund industry. These include the industry broadly failing to deliver on its ‘absolute returns’ premise and charging high fees to achieve returns that have ultimately been correlated to equity and credit markets during periods of stress.”
