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UBS plans US market-neutral fund

UBS Global Asset Management is looking to to launch a US market-neutral fund.

It is understood to be a rep- lica of its US fundamental equ- ity market-neutral fund, an equity long/short offering set up in 2008. The Oeic will adopt a Ucits III structure and follows the original product in being market, sector and factor-neutral. The original fund holds 100-150 long and 100-200 short positions.

It will invest in holdings based on fundamental rather than quantitative analysis. A portfolio application developed by the Systemic Alpha team is used to integrate stock selection, assess risk and trading costs and to help the manager construct the portfolio.

The fund is understood to target a return of cash plus 5-10 per cent a year, with volatility under 10 per cent over a three-year rolling period.

Hargreaves Lansdown senior analyst Meera Patel says: “These type of funds are a complete hedge against the market and much of their success depends on the manager skillset. The only fear is they could launch in the midst of a recovery, in which case it would underperform.”

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