Acadian unveils ‘highly diversified, risk-reduced’ | Australian Markets

Quant investing specialist Acadian Asset Management has launched a new rising markets equity fund for Australian buyers, leveraging the firm’s experience in systematic, or ‘quant’, investing.

The Acadian Enhanced Emerging Markets Equity (Class A) fund, constructed for wholesale buyers, seeks out risk-adjusted, long-term returns.

It does this by investing in a “highly diversified” pool of round 500 stocks that contribute small quantities to the overall return over time, mentioned Acadian Australia chief government Gillian Savage, “[generating] incremental returns above the benchmark while reducing active risk.”

According to Savage, rising markets (EMs) investing – identified to expertise intervals of high volatility – has more and more lent itself to quant-style investing.

He notes that the EM alternative set had broadened considerably over the previous decade due to the enlargement of the investable universe, improved knowledge protection, and lowered trading prices.

“We are global specialists in systematic investing and our approach benefits investors over the long term by generating a more consistent return profile, which is a highly valuable attribute in an asset class like emerging markets because it can experience periods of high volatility,” she mentioned.

Mark Mukundan, Acadian Australia’s director of wholesale markets mentioned the fund is designed as a core rising market holding, “due to its high stock diversity, multi-factor approach, and low stock-specific risk profile”.

“It could also be a complementary and differentiating feature if positioned alongside higher risk concentrated strategies or a possible replacement for an index allocation,” he mentioned, noting the fund’s aggressive management price.

The fund attracts a management price of 0.47%, which Acadian notes is decrease than current MSCI EM Index replication methods.

Colonial First State (CFS) will function accountable entity for the fund.