Global Asset Management (GAM) is following up its launch into the multi-manager hedge fund market with Global Trading III.
Global Trading III is an offshore fund domiciled in the British Virgin Islands and administered in Dublin. It is aimed at cautious investors on their guard about further stockmarket falls.
The fund will invest in a portfolio of up to 14 hedge funds that cover four different investment strategies. These are global macro funds, which attempt to predict what will happen in the global market, trend following, which is designed to identify upward trends in the prices of futures and options, and non-trend following, which aims to identify falls in the value of futures and options.
The fourth strategy is called relative value. This strategy attempts to identify equities or currencies that seem to be undervalued, and buy them on the basis they will increase in value.
Fund selection is not finalised, although four have been announced. These are the Tudor BVI, the Moore global fixed income, Rubicon global and Grossman currency funds.
A 29-strong team will manage the fund from London and New York. Heading the team will be Nancy Skiest Andrews, who joined GAM in September 2000 after five years as director of trading at Computer Trading Corporation.
2001 has seen a great deal of stockmarket volatility, with global fears of recession. This volatility could affect hedge funds. Hedge funds tend to be more suited for investment during times of stockmarket stability. Current market conditions may not be suitable for many hedge fund investors.
Looking at the other two GAM multi-manager hedge fund of funds, according to Standard & Poor's the GAM trading US$ is ranked 18 out of 58 funds in its sector, while the GAM trading II fund is ranked 29 out of 58 funds, both based on £1,000 invested on a bid-to-bid basis with gross income reinvested over three years to July 23, 2001.