The Investment Manager has a wide discretion over the investments that may be held by the Trust. The pursuit of a diverse range of global investment strategies means that the Trust’s returns are not necessarily dependent on any stock markets’ direction, or dependent on any specific assumption or key market parameter. The Trust does not seek to replicate the standard industry benchmarks.
The Trust seeks to take advantage of companies that are expected to increase in value relative to the market around the announcement of their quarterly, half-yearly and yearly earnings results, while hedging their market and currency exposure.
In selecting additional investments for the Trust, the Manager follows a rigorous investment selection process which includes detailed qualitative and fundamental research.
The investment analysis and selection process involves four key steps which are summarised as follows:
- The Trust focuses on the universe of global exchange listed equities and equity derivatives, including options and convertible securities.
- We research various criteria and reasons to invest in particular situations. These criteria may pertain to fundamental and quantitative analysis, company event situations such as takeovers and mergers, earnings announcements, demergers and restructuring, liquidity events, recapitalisations, multiple share classes, option availability and pricing.
- The catalyst for the Trust to enter a trade is identifying mispriced risk. This is assessed in the context of a broad portfolio of listed equities, options, and other instruments. We continually evaluate market indicators of risk, and seek opportunities across a range of strategies – whilst having regard to the expected time horizon of each investment.
- Once an investment decision is made, the implementation of the trade is conducted in parallel with an active focus on risk management.
The Trust may use derivatives for risk management as well as to create new positions. The Trust may opportunistically short sell securities that are considered to be overpriced in the anticipation of purchasing them later at lower prices for a profit and/or to reduce risk on the overall portfolio.
Leverage may be used to enhance returns by allowing the Trust to participate in short term opportunities which provide attractive risk-return propositions. Accordingly, the Trust invests in opportunities that it considers to offer attractive risk return characteristics with a focus on potential catalysts that seeks to generate a profitable return regardless of the market direction.