Aquila Capital, a Germany-based alternative asset manager, has launched AC Risk Parity Bond Fund that will focus solely on fixed income.
The fund aims to offer investors long term stable returns regardless of the twists and turns in the economic and fixed income cycle. It targets a return of cash plus 3% with annualised volatility of approximately 3%.
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According to the company, the fund will apply a systematic allocation method that will not rely on forecasts or duration targeting.
It will invest with equal risk weightings across four uncorrelated types of fixed income asset. These are Government Bonds, Corporate Bonds, Carry Positions in Emerging Markets and Inflation-linked Bonds.
Torsten von Bartenwerffer, senior portfolio manager at Aquila Capital, commented: "The AC Risk Parity Bond Fund is designed to offer investors long-term stable returns irrespective of market conditions and we believe this will strongly appeal to a broad range of long term conservative investors.
"Capital is allocated based on the risk an asset contributes to the portfolio rather than predicted returns and market timing plays no role at all. Instead, the strategy focuses on managing uncertainty through effective diversification between assets that have no correlation to each other and which have various correlations to different phases of the economic and fixed income cycles. Sub asset classes are selected such that as one goes down, one or more of the others will rise," von Bartenwerffer added.
The fund, which is set up as a Luxemburg-based UCITS (SICAV) has a minimum investment of EUR 50,000.
