The fund aims to offer investors a positive absolute return regardless of market conditions. The intention is to deliver an 8-10% return after fees whilst implementing long and short positions in UK equities. They adopt a business cycle approach to selecting stocks and building the underlying portfolio.
The business cycle will typically dictate the stock selling process for long positions but any fall greater than 10% will initiate a stock review. The maximum gross exposure permitted is 250% with a maximum 50% net exposure.
Although in practice the gross exposure will typically be 100-175%. As demonstrated below, performance has drifted significantly from what an investor might expect from a mandate of this nature as it continues to slip down the ranks when compared with its peer group.
Whilst 2013 calendar year performance was robust at 9.47%, ytd performance (2014) has delivered a reversal of fortunes at -4.62% leaving the fund with a third quartile location.