Almost half of the BlackRock MLIM UK absolute alpha fund is currently shorting stocks, says manager Mark Lyttleton.
Responding to an IFA question on Asset TV, Lyttleton said he will never short stocks he holds in the long-only UK dynamic fund he also runs and insisted the two funds are run as distinct portfolios.
The absolute alpha fund can also use synthetic shorting techniques under Ucits III rules. Lyttleton added that the fund is currently invested 55 per cent long on stocks and 45 per cent short.
Lyttleton said: “I also run long only money but am very strict about not shorting any stocks that are in the other portfolios. The fund benchmark is to produce positive returns whatever the market conditions.”
The Cazenove multi-manager diversity fund also has exposure to IAM’s AISL fund of hedge funds run by Alan Djanogly.
Djanogly responded to an IFA concerned that hedge fund returns were falling saying the hedge fund universe was growing quickly and advisers had to look for experienced managers with proven track records. He added that the attitude that hedge funds were a risky investment is media-driven.
He said his fund funds is currently diversified across 30 different fund managers, with weightings typically between 3 and 5 per cent, and exposure to 9 different investment strategies and five different geographic locations.
Djanogly said: “The risky attitude towards hedge funds is perpetuated by the media. We have operated in all economic environments and our results speak for themselves.”