Nomura launches Ucits III long-short interest rates fund

Japanese investment banking giant Nomura is adding to its range of Ucits III products with the launch of the Nomura Interest Rate Investment Strategy IRISx4 Fund.

The absolute return fund, aimed at institutional investors, will offer daily liquidity and invest in interest rate markets.

It will provide four times leveraged exposure to the performance of of the Nomura Interest Rate Investment Strategy (IRIS), an interest rate positioning index which dynamically adjusts in changing market and economic conditions using macro-economic and quantitative indicators.

The IRIS strategy implements long or short positions across the interest rate curves in the UK, eurozone, USA, Canada, Japan and Australia. It uses more than 40 trading positions in liquid fixed income instruments: money-markets futures, bond futures and interest rate swaps.

'Despite current market conditions, investors are still looking for absolute excess returns in the range of 7 to 8 per cent over cash, but without the volatility that usually accompanies such high alpha,' said Jean-Philippe Royer, head of the Fixed Income Fund Solutions Group at Nomura.  'The IRISx4 fund was developed to respond to that demand.'

Initially, the Nomura Interest Rate Investment Strategy IRISx4 Fund, will launch in euro and sterling hedged share classes for institutional investors, with advisor share classes launching across major European markets in the coming months.