First Quadrant, a currency manager affiliate of AMG, said the FQ Global Alternative Return Fund is an alternative strategy that takes long and short positions in 11 developed currency markets and seeks to deliver positive returns over full market cycles.
Partner and portfolio manager at First Quadrant Jeppe Ladekarl said the global financial crisis created a call for investors’ portfolios to include alternative sources of non-equity return.
“Investors may be looking for exposure to alternative assets to improve diversification characteristics because equities are at near all-time highs, bonds look challenging and cash yields are uninspiring,” said Mr Ladekarl.
Currency as an asset class does not behave like other asset classes, he said, and factors that drive currency are different from those that drive equity and fixed income markets.
“This strategy targets low correlation with those major asset classes, providing a hedge against them at a reasonable cost and with better liquidity than most hedge funds,” he said.
“This strategy, now open to Australian investors via an Australian unit trust, was established in 1992 and currently makes up over US$7 billion of FQ’s US$19 billion in assets under management,” Mr Ladekarl said.
