How do the funds differ?
All Argonaut funds use the same investment process to select stocks, which will also reflect our current investment views, but there are some key differences in the expected return profile of the different funds and their potential investment universe.
The Absolute Return fund is a global long/short equity fund which aims to deliver a return profile which is uncorrelated to the stock market and therefore most other funds. It seeks to achieve this largely through “shorting” stocks it doesn’t like, which “hedges” the market exposure of the bigger “long” portfolio, stocks we think will appreciate in value. It may also use “leverage” to potentially enhance returns. The success of the strategy should therefore be measured in terms of “absolute” rather than “relative” returns. The expected return profile may therefore offer valuable diversification for unitholders away from overall stock market direction.
The Alpha and Income funds will usually be fully invested, predominantly in European equities, without any ability to “short” or “hedge” market exposure. The success of these strategies should therefore be measured in terms of “relative” performance to the European stock market. In addition, the Income fund will seek to maximise opportunities in high dividend yielding stocks, offering its unitholders attractive dividend income.