View more on these topics

BoE hedges out the competition

BoE International, the South African investment banking group, has introduced a fund of hedge funds that will initially invest in 12 hedge funds.

The BoE International market neutral fund is an open-ended investment company based in the Isle of Man. It aims to provide high net worth investors with high returns and low volatility by investing in funds that use a long and short hedging strategy.

Long and short selling is the most popular hedging technique. The fund manager buys stocks that look likely to increase in value when the stockmarket is on the up and can also sell short. This is where fund managers borrows shares from a broker for a fee and sells them with the intention of buying them back when the price falls.

Although the fund invests in hedge funds that use the same strategy, diversity is achieved through a blend of fund managers who have their individual management styles. Each fund may also focus on different sectors and regions. No single fund will take up more than 20 per cent of the overall portfolio, which means it is less risky than investing in a single hedge fund.

However, the flip side of lower risk is that the experienced high net worth individuals that are attracted to hedge funds would get higher returns from riskier investments in a single hedge fund.

Recommended

Bad connection

Am I the only IFA that suffers from hanging about syndrome or phone“queueitis”? Maybe we should have provider performance tables based on response timesto your phone call, not forgetting, of course, that past perform-ance is noguide to the future. Oh, for the days of human phone operators. At least they answered thephone. Must dash. Have […]

Standard&#39s mutuality stalwarts step down

Standard Life managing director Scott Bell, stalwart of the company&#39smutuality stance, is retiring in March next year after more than 40 yearsat the life office. Long-term colleague and chief executive of UK operations Jim Stretton isalso standing down. He will take early retirement on December 15. Current group finance director and appointed actuary Iain Lumsden […]

Scottish Widows wins motor industry stakeholder business

The Retail Motor Industry Federation has selected Scottish Widows as its stakeholder pension provider. The Widows’ stakeholder plan will be available to over a million employees of the RMI’s 10,500 member companies. The scheme will provide access to Widows’ funds, external funds, and a full range of support materials.Scottish Widows senior manager of corporate business […]

Outside Edge by Robert Reid

In my last column I expressed my surprise at the recent Towry Law dealdone with the ICS. From the point of timing, it could not be worse aslevies will be collected in July and August (yes, there are two this time). Is this the chance we have been waiting for? Polarisation will go,and weneed to […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment