The manager is returning to retail fund management after a ten-year break, during which he took time out from the industry and then ran a hedge fund for Artemis.
It is the first fund launch from the group in four years, and follows the wind up of Littlewood’s hedge fund, Absolute Return, last year when he became concerned the counterparty was about to go bankrupt.
The Strategic Assets fund will make full use of Ucits III powers and go long and short in equities, bonds and commodities.
It can also invest in currencies and hold up to 50% cash. It will be launched on May 5, 2009.
The fund will sit in the Active Managed sector because it can adopt a total return or absolute return stance. There will be no performance fee and the total expense ratio is estimated at 1.7%.
Littlewood says that the fund will be managed with more emphasis on top-down than bottom-up, but his views remain bearish.
“I have been bearish for a long time – probably since 1998 – and I believe we should have had a big recession in 2000. Personally I don’t think the bear market is over, as they usually end in a cathartic mess. It is possible we hit the bottom a month or so ago, but I think there maybe more of this to come.
“I am cautiously investing, and the fund is likely to go down a bit at the very start.”
Although he expects the fund to be defensively positioned initially, with a high cash position and an allocation to gold, he says the portfolio is nimble enough to switch from defensive to aggressive. He is also is wary of “an inflationary era” which he expects Britain to enter in about a year.
“It is possible shares will blow out their old lows and I think it will continue to be volatile. But when in an inflationary era, which I am confident is in our future, I want to be in real assets, not in cash,” Littlewood adds.