SYZ Asset Management believes its Altin fund is one of the first listed funds of hedge funds to declare a dividend for shareholders.
The firm will pay a dividend yield for 2011 of 9.3 per cent based on the fund’s end-of-year share price. It intends to pay dividends in future years and hopes this will make the fund more attractive to investors, along with its commitment to full transparency of holdings on a quarterly basis.
Altin has had a good start to 2012, producing positive year to date returns of 4.53 per cent as at March 31. But to protect that good start against a mixed outlook for financial markets, SYZ has created a new type of investment category for the strategies in its Altin fund of hedge funds.
The new category, protection strategy, comprises a 5.02 per cent holding in the LAMP capstone convexity fund and a 0.49 per cent allocation to the LAMP conquest customised macro master fund 2X. SYZ says both funds are built to perform well in difficult market conditions.
The LAMP conquest previously formed part of Altin’s allocation to managed futures. The fund trades futures indices mainly in equities and bonds and is expected to take short positions in the event of a market correction.
The LAMP capstone fund is a tail-risk hedging strategy. Tail risk refers to the damaging impact that rare events or worst-case scenarios can have on portfolios. Tail-risk hedging strategies aim to protect against falling asset prices and during a market correction.
SYZ head of alternative investments Jose Galeano says: “The outlook is always mixed so we want to take a barbell approach. We have the US recovering slightly and a soft landing in China, which is on the positive side, and we want to take advantage of that through equities. But we still have issues such as the sovereign debt issue in Spain and want to have protection from a sudden correction.”