Bloxham to launch global absolute return fund

Bloxham is planning to take advantage of demand for low volatility strategies with the launch of a global absolute return fund.

The Ucits III Bloxham Midas Global Absolute Return fund is set to launch in late October and will be managed by Kevin McConnell, who is director of investment strategy at the firm.

McConnell seeks to return 8-10% per annum with volatility under 35%, which he hopes will be achieved through an average cash position of around 35% which can be increased to 100% in difficult market conditions.

McConnell said: 'This differentiates us as we are running a cash position which is higher and means that we are not leveraged into the market, so we do not have to deleverage into a market where cash is drying up.'

McConnell and his three-strong team will use Bloxham's Midas system, which was initially set up in 2003 and has been developed to include trend analysis.

The system seeks to identify oscillation trading ranges for stocks, negative and positive market trends alongside confusion stages where no trends are identifiable and will establish long and short positions in response.

The team will monitor over two thousand stocks globally, while the portfolio will tend to hold around 25 to 40 long and short positions spread across what they see as five 'super sectors'.

These are defensives, early cyclical, financials, late cyclical and technology. Over the past 14 months the test portfolio has returned 29%.

McConnell explained: 'The technical analysis model has been stress tested over 10 years and built to combat the worst market conditions evidenced post Lehman Brothers collapse.

'The fund uses a variety of indicators and unbiased decision making to determine what to invest in globally. The use of cash further ensures the fund will offer low volatility.'