Global equities
15 Mar 2019 | By Ian Heslop, Justin Wells

Re-engage with equity market neutral

Investors should re-engage with equity market neutral as an uncorrelated investment strategy able to enhance risk adjusted returns.

  10 viewed

The calendar year 2018 marked the re-emergence of index level volatility for global equities as an asset class. It followed an extended period of accommodative monetary policy and low interest rates, coinciding with a near 10 year bull market in global equities.

During this 10 year period there was a proliferation of purportedly uncorrelated investment strategies variously labelled as ‘liquid alternatives’ and ‘absolute return’ funds. Alongside the diversity of underlying investment strategies, was a diversity of investor expectations of return outcomes from these strategies. Given the economic and financial backdrop of the decade after the global financial crisis (GFC), it is perhaps unsurprising that genuinely risk controlled, liquid investment strategies, which consistently demonstrated uncorrelated returns, attracted flows from a very wide variety of types of investor. Some investors sought fixed income substitution, in an environment starving for yield; others sought a tactical short term home for cash, with bank deposit rates at rock bottom. Latterly, with the return to a high cross sectional volatility environment in 3Q and 4Q 2018, others seek downside protection.

In the aftermath of the market regime change and enhanced index volatility, which characterised calendar year 2018, the return outcome of many such strategies has come under renewed scrutiny. At the same time, the unwinding of the most prolific global monetary stimulus in modern economic history has caused some market participants, conditioned to a negative real yield environment, to challenge both the relevance and role of equity market neutral strategies.

Return outcomes for equity market neutral strategies in 2018 were generally less robust relative to experience over recent calendar years. The effects of divergent regional monetary policy increased the attractiveness of cash to dollar denominated investors. Concurrently, the pronounced oscillation between risk on and risk off, fuelled by 24/7 news flow and unregulated (anti-) social media, have led some market participants to question the future efficacy of such uncorrelated investment strategies.

However, it is precisely during periods of frustration, or disappointment around performance outcomes, and more particularly around ‘perceived’ outcome expectations, that investors face an increased risk of succumbing to behavioural biases, such as an overreaction to short term performance. As a team we are acutely aware of such tendencies, given that a significant proportion of our alpha generation consists of identifying inefficiencies and mispricing wrought from behavioural biases and tendencies often exhibited by market participants.

This paper aims to show the importance to investors of the core principles of equity market neutral as one of the most established and consistently robust uncorrelated investment strategies, capable of genuinely enhancing investors’ risk adjusted returns. With index level volatility once again normalising in an environment of quantitative tightening, harnessing a return source that is both demonstrably independent of equity markets, and capable of navigating downside risk is arguably more relevant to portfolio construction than at any time during the past five years. We shall firstly present the empirical and statistical case underpinning the assertion that equity market neutral represents a universally adaptable investment strategy. We shall then reaffirm the continued relevance of genuine equity market neutral strategies in mitigating systemic risk, particularly in the aftermath of recent regime changes across the broader market.

In the context of the recent regime change, it is worthwhile revisiting the core principles behind equity market neutral strategies, as we move out of the era of quantitative easing (QE). Particularly given that the QE era has been associated with a surge in passive and index type strategies, it is only right that we question whether this effect has eroded away the informational advantage of more established uncorrelated investment strategies. In a similar vein, the narrative around the ‘democratisation’ of factor investing highlights how the crowding effect in certain areas of the market may have further reduced the opportunity set for such strategies. Upon revisiting the rationale for equity market neutral investing, it is refreshing to learn how the weight of empirical and statistical evidence continues to substantiate the strategy’s ability to generate returns that are independent of market direction, by profiting from both long and short ideas, while ensuring dollar and beta neutrality.

Corroborating this position, the table below shows the return correlation of traditional asset classes1 to alternative hedge fund styles, using the HFRI hedge fund indices, both since inception2 and for the last five years. While diversification to bonds comes easily across all hedge fund styles only global macro and equity market neutral styles offer anything like uncorrelated returns to equities. The Merian Global Equity Absolute Return Fund (GEAR) has considerably lower correlation to traditional assets than both our peer group, and other hedge fund styles.

 

Source: MGI as at 30/12/2018

Equity market neutral as an investment strategy seeks to limit exposure to systemic changes in asset pricing caused by shifts in macroeconomic variables or investor idiosyncrasies. Typically this is achieved by taking offsetting long and short positions in instruments with actual or theoretical relationships. In effect, the strategy strives to generate consistent returns in both rising and falling markets, through selecting positions with a total net exposure of zero.

The end result is not just uncorrelated returns, it is performance when it is needed most. Below we see the average monthly returns of the above asset classes and indices when equities experience positive and negative returns. Over the full sample, equity market neutral is the only strategy insulating from market falls with results being consistent in the most recent five year sub period. The Merian Global Equity Absolute Return Fund has offered a positive return in both environments, in both sample periods.

 

Source: MGI as at 30/12/2018

The expansive return series upon which this empirical and statistical evidence is predicated warrants some caveats. Historical events may not necessarily repeat owing to limitations in data, or to the time varying effects of outcomes over discrete periods of data. However, with the benefit of 24 years of return series including several full market cycles, not to mention the GFC and an extended period of QE, there exists a rich and diverse data set from which to gain multivariate insight into the interaction between asset classes. At the same time, it is difficult to empirically and robustly examine the hypothesis that ‘this time it is different’ without examining a more recent subsample of data. Here we find evidence across the two subsamples examined offering very little consistent support for a hypothesised structural change.

While historic returns for asset classes may be susceptible to time varying or regime specific effects, and by extension more difficult to forecast, volatilities and correlations, by contrast, have characteristically proven more stable and sustainable through time – and, by virtue of this, more predictable through time. From a quantitative perspective, this is something we can attempt to model, and to obtain a forecast outcome.

Comparisons to other alternative investments provide one petri dish by which to examine the benefits of investing in equity market neutral funds. However, it is possibly more important to examine the benefits they provide in excess of traditional assets, which typically make up the vast majority of investor holdings. An historic analysis of incorporating equity market neutral to a global equity portfolio reaffirms the benefit of equity market neutral strategies in enhancing risk adjusted return outcomes.

As an initial benchmark, the efficient frontier from a portfolio allocating to MSCI regional equity indices is constructed constraining weight in each regions to be a maximum of 30% to ensure a diversified, realistic portfolio3. The graph below shows the impact to the efficient frontier of including an allocation of the HFRI Equity market neutral index in 10% increments. This methodology highlights the set of possible portfolio allocations which maximise expected returns for a given level of risk. In effect, the same return would have been achieved with lower volatility by increasing the allocation to equity market neutral investments.

 

Source: MGI as at 30/12/2018

In the second analysis, we incorporated fixed allocations to bonds alongside equities and equity market neutral, extending our analysis to an asset allocation setting. The equity/bond portfolio has a fixed 30% weight to the FTSE World Government Bond index and 70% allocation to equities with similar constraints to the prior equity analysis4. Again the same level of return would have been achieved with lower volatility through increasing the allocation to equity market neutral as an asset class. It is possible to observe that the critical impact remains in the lower to medium risk return area; albeit within such areas the impact in terms of enhancing risk adjusted returns can be meaningful.

 

Source: MGI as at 30/12/2018

In light of the different sources of returns derived respectively from stocks, bonds and equity market neutral strategies, the ‘efficient frontier’ highlights how variability in overall portfolio volatility may be dramatically reduced without suffering a proportional decrease in returns. Looking at the allocations of portfolios at the efficient frontier, we can see the optimal allocation to market neutral increases almost monotonically as one goes from the highest risk portfolios, which have a small allocation to market neutral of 1%, towards medium risk portfolios, with an allocation to market neutral of around 20%, while the lowest risk portfolio has an allocation which we limit to 30%.

 

Source: MGI as at 30/12/2018

Of particular note, if we compare the unconstrained efficient frontier between a two asset equity, bond portfolio and a three asset portfolio including the HFRI equity market neutral index increased allocation to market neutral strategies would have produced a higher return than that achieved from bonds, while incurring less risk5

 

Source: MGI as at 30/12/2018

Finally, the marginal return for a given level of market risk incurred (Treynor ratio) is examined through incrementally moving allocation from equities to bonds, the HFRI Equity market neutral index, or the Merian Global Equity Absolute Return Fund. Using data since the inception of GEAR, the Treynor ratio is improved firstly when allocating to equity market neutral rather than bonds, and secondly through allocating to GEAR over the HFRI representative peer group index.

 

Source: MGI as at 30/12/2018

In contrast with the previous analysis which demonstrates how well equity market neutral funds reduce total risk, here it is shown they also have the ability to diversify equity market risk, commonly the largest source of risk within traditional equity bond portfolios. In essence the impact of this equity market neutral strategy offers

returns that are higher than those of fixed income, but with a lower volatility profile than equities. As we have frequently highlighted, the hedged nature of the GEAR strategy frequently sustains positive performance during episodes of negative stock market performance.

Equity market neutral strategies clearly do not eliminate risk entirely; rather they allow investors to hedge unwanted risks and to retain exposure to risks they wish to maintain. As with all investment strategies, there will be environments which are more conductive to the process, and less frequently there will be environments which are less conductive to the process. Market neutral strategies are intended to trade exposure to the market for exposure to the relationship between the long and short sides of their portfolio. Relative value investing takes a non-directional approach, with returns coming from the net result of the long and short components. Performance is decomposed between the long book, relative to a long index, and the short book, relative to a short index. As such, the risk to an equity market neutral strategy is relative stock picking risk rather than an absolute stock picking risk. As set out above, we have conviction (based on evidence) in the relevance and value of an equity market neutral strategy in enhancing risk adjusted returns in a diversified portfolio; it has proven its consistency and uncorrelated effect through different market cycles and in diverse market conditions.

Arguably in the aftermath of the regime changes which took place in 2018, the power of the strategy better to mitigate idiosyncratic risk makes an allocation to portfolio more relevant today, given the profound geopolitical and macroeconomic risk embedded in the real economy. Finally, we believe that the robustness of our investment platform, together with our prioritisation and focus on research, makes our proposition ideally placed to mitigate those risks more generally levelled at the investment strategy, such as adaptability and responsiveness to regime change. Our expectation is that the fund should continue to provide diversification over the medium term against equity market moves, as it has done historically. Our expectation for performance over the medium term continues to be positive, both under a continuation of the current uncertainty and also if the environment becomes more benign.

Source:

1 MSCI AC World index is used for equities, and the FTSE World Government Bond Index for bonds. The 60 40 Portfolio is a 60%, 40% weighting of these two indices rebalanced monthly. All returns are monthly total returns.

2 January 1995 for the HFRI Indices, June 2009 for GEAR. Data used up to and including December 2018 with last five years being the period 2014 – 2018.

3 The portfolio is comprised of MSCI North America, MSCI Europe, MSCI Japan, MSCI AC Asia excluding Japan and MSCI Emerging Markets. Expected return and risk estimates are calculated using monthly total returns over the full sample period of January 1995 to December 2018.

4 The equity component of the portfolio is comprised of MSCI North America, MSCI Europe, MSCI Japan, MSCI AC Asia excluding Japan and MSCI Emerging Markets with each region having a maximum allocation of 30%. For bonds we have a fixed 30% allocation to the FTSE World Government Bond Index. We choose a 70:30 equity bond allocation rather than the usual 60:40 in recognition that Equity market neutral performance has volatility more in keeping with bonds than equities. Increasing allocations to equity market neutral moves the risk profile of the 70:30 portfolio towards that of the 60:40 benchmark. Efficient frontier shifts are robust to using a 60:40 allocation with returns and risk both being lower.

5 Expected return and risk estimates are calculated using monthly total returns over the full sample period of January 1995 to December 2018.

Disclaimer:

Europe

Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rates may cause the value of overseas investments to rise or fall.

This communication is issued by Merian Global Investors (UK) Limited (“Merian Global Investors”), Millennium Bridge House, 2 Lambeth Hill, London, United Kingdom, EC4P 4WR. Merian Global Investors is registered in England and Wales (number: 02949554) and is authorised and regulated by the Financial Conduct Authority (FRN: 171847).

This communication provides information relating to Merian Global Equity Absolute Return Fund (the “Fund”), which is a sub-fund of Merian Global Investors Series plc. Merian Global Investors Series plc is an investment company with variable capital established as an umbrella fund with segregated liability between sub-funds which is authorised and regulated by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended. Registered in Ireland under registration number 271517. Registered office: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland.

Merian Global Investors uses all reasonable skill and care in compiling the information in this communication which is accurate only on the date of this communication. You should not rely upon the information in this communication in making investment decisions. Nothing in this communication constitutes advice or personal recommendation. An investor should read the Key Investor Information Document(s) (“KIID”) before investing in any sub-fund of Merian Global Investors Series plc. The KIID and the prospectus can be obtained from www.merian.com in English and other required languages.

Certain paying and/or information agents have been appointed in connection with public distribution of the shares of Merian Global Investors Series plc in certain jurisdictions. Shares are sold by prospectus only. The prospectus, KIID and/or other relevant offering documentation is available free of charge at:

Austria: Erste Bank der oesterreichischen Sparkassen AG, Belvedere 1, 1010 Wien, Austria.

Belgium: CACEIS Belgium SA, B-1000 Brussels, Avenue du Port 86 C b320, Brussels.

Germany: GerFIS – German Fund Information Service UG (Haftungsbeschränkt), Zum Eichhagen 4, 21382 Brietlingen, Germany.

France: BNP Paribas Securities Services, Les Grands Moulins de Pantin, 9 rue du Debarcadère 93500  Pantin,  France.

Hong Kong: Merian Global Investors (Asia Pacific) Limited, Unit 2, 5/F Two Chinachem Central, 26 Des Voeux Road Central, Hong Kong.

Italy: Allfunds Bank S.A.U., Milan Branch, Via Bocchetto, 6, 20123 Milano, Italia; Societe Generale Securities  Services S.p.A, Via Benigno Crespi 19A – MAC2, Milan and BNP Paribas Securities Services, Piazza Lina Bo Bardi No.3, Milan.

Luxembourg: BNP Paribas Securities Services, Luxembourg Branch, 33 rue de Gasperich, L-5826, Grand Duchy of Luxembourg.

Sweden: Skandinaviska Enskilda Banken AB (“SEB”), Kungsträdgårdsgatan 8, SE-106 40, Stockholm, Sweden

Switzerland: First Independent Fund Services Ltd., Klausstrasse 33, CH-8008 Zurich is the Swiss representative and BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, CH-8002 Zurich is the Swiss paying agent. Taiwan: Capital Gateway Securities Investment Consulting Enterprise, 9F/9F-1, No. 171, Songde Road, Xinyi District, Taipei City, Taiwan, R.O.C.

United Kingdom: Merian Global Investors (UK) Limited, Millennium Bridge House, 2 Lambeth Hill, London, United Kingdom, EC4P 4WR. The Fund is recognised by the FCA.

Other: Merian Global Investors Series plc, c/o Citibank Europe plc, 1 North Wall Quay, Dublin 1, Ireland.

In Denmark, this material is only intended for the exclusive use of Danish eligible counterparties or professional investors. Danish retail investors may not invest in the sub-funds mentioned in the material.

In Spain, Merian Global Investors Series plc is registered with the Comisión Nacional del Mercado de Valores (“CNMV”) under number 301. Merian Global Investors is registered under number 2479. The prospectus, KIID and the latest economic reports can be obtained at no cost from registered distributors as per the list available on the CNMV web page.

In the Republic of Finland, this communication is not intended to constitute a public offer or an advertisement of securities.

In Italy, this material is for the exclusive use of “professional clients or professional investors” (as defined in Legislative Decree no 58/1998 by reference to Annex 3 of CONSOB Regulation no. 20307 of 2018) and its dissemination to retail investors/clients is prohibited.

In Luxembourg, this information does not constitute, under any circumstances, an offer or an invitation to purchase or sell shares in Luxembourg and does not and is not intended to constitute an offer of shares in the Grand Duchy of Luxembourg. It does not constitute legal, accounting, or tax advice.

The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus.

 

Switzerland

Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The performance data does not take account of the commissions and costs incurred on the issue and redemption of shares. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money. Exchange rate changes may cause the value of overseas investments to rise or fall.

This communication provides information relating to a fund known as [name of fund] (the “Fund”), which is a sub-fund of Merian Global Investors Series plc. Merian Global Investors Series plc is an investment company with variable capital established as an umbrella fund with segregated liability between sub-funds which is authorised and regulated by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended. Registered in Ireland under registration number 271517. Registered office: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland.

This communication is issued by Merian Global Investors (Switzerland) LLC (“Merian Global Investors”), Schützengasse 4, 8001 Zürich, Switzerland, a distributor of Merian Global Investors Series plc. Merian Global Investors is regulated by the Swiss Financial Markets Supervisory Authority FINMA.

This communication has been prepared for general information only. It does not purport to be all-inclusive or contain all of the information which a proposed investor may require in order to make a decision as to whether to invest in the Fund. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommendation. No investment decisions should be made without first reviewing the prospectus and the key investor information document of the Fund which can be obtained from www.merian.com in English and other required languages.

The Fund has been approved for distribution to non-qualified investors in or from Switzerland by the Swiss Financial Market Supervisory Authority FINMA (“FINMA”). First Independent Fund Services Ltd., Klausstrasse 33, CH-8008 Zurich is the Swiss representative and BNP Paribas Securities Services, Paris, succursale de Zurich, Selnaustrasse 16, CH-8002 Zurich is the Swiss paying agent in relation to the shares of the Fund (“Shares”) distributed in or from Switzerland. Accordingly, the Shares and the relevant fund documents and any offering material relating to the Fund and/or the Shares may be distributed in or from Switzerland to non-qualified investors. In respect of the Shares distributed in or from Switzerland, the place of jurisdiction is at the registered office of the Swiss representative.

Copies of the prospectus, the memorandum and articles of association, the key investor information documents as well as the annual and semi-annual reports of the Fund may be obtained free of charge from the Swiss representative, First Independent Fund Services Ltd., Klausstrasse 33, 8008 Zurich, Switzerland.

The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus.

 

Asia

Past performance is not indicative of future performance and may not be repeated. Investment involves risk. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money.  Exchange rates may cause the value of overseas investments to rise or fall.

Hong Kong:

This communication provides information relating to Merian Global Equity Absolute Return Fund (the “Fund”), which is a sub-fund of Merian Global Investors Series plc. Merian Global Investors Series plc is an investment company with variable capital established as an umbrella fund with segregated liability between sub-funds which is authorised and regulated by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended. Registered in Ireland under registration number 271517. Registered office: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland.This communication has been prepared for general information only. It does not purport to be all-inclusive or contain all of the information which a proposed investor may require in order to make a decision as to whether to invest in the Fund. Nothing in this communication constitutes a recommendation suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommendation. No investment decisions should be made without first reviewing the offering document (including the risk factors) and the key fact statement of the Fund (if applicable) which can be obtained from www.merian.com. This communication has not been reviewed by the SFC. This communication is issued by Merian Global Investors (Asia Pacific) Limited. Merian Global Investors (Asia Pacific) Limited is licensed to carry out Type 1 and Type 4 regulated activities in Hong Kong. The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus. The Fund is not authorised by the Securities and Futures Commission (“SFC”) in Hong Kong. and is not available to retail investors in Hong Kong. This document is distributed to professional investors only and has not been reviewed by any regulatory body in Hong Kong. It is for reference only and for those persons or entities in any jurisdiction or country where the information in this document and use thereof is not contrary to local law or regulation. It is intended solely for the use of the person to whom it has been addressed and delivered and shall not be reproduced in any form or transmitted to any other third party. In particular: (i) no offer or invitation to subscribe for shares in the Fund may be made to the public in Hong Kong; (ii) this document has not been approved by the SFC or any other regulatory authority in Hong Kong and accordingly shares in the Fund may not be offered or sold in Hong Kong by means of this document or any other document other than in circumstances which do not constitute an offer to the public for the purposes of the Hong Kong Securities and Futures Ordinance (“SFO”), as may be amended from time to time. If you are in doubt, please consider seeking independent professional advice.

Singapore: This communication provides information relating to a fund known as Merian Global Equity Absolute Return Fund (the “Fund”), which is a sub-fund of Merian Global Investors Series plc. This communication is issued by Merian Global Investors (Singapore) Pte Limited, which is not licensed or regulated by the Monetary Authority of Singapore (“MAS”). Merian Global Investors (Singapore) Pte Limited is affiliated to Merian Global Investors (UK) Limited.  Merian Global Investors (UK) Limited (“Merian Global Investors”), Millennium Bridge House, 2 Lambeth Hill, London, United Kingdom, EC4P 4WR.  Merian Global Investors is registered in England and Wales (number: 02949554) and is authorised and regulated by the Financial Conduct Authority (FRN: 171847) but is not licensed or regulated by MAS. The Fund is only notified as a restricted scheme by MAS and is not allowed to be offered to the Singapore retail public. This marketing document shall be construed as part of an information memorandum for the purposes of section 305(5) of the Securities and Futures Act, Cap. 289 of Singapore (the “SFA”). Accordingly, this marketing document must not be relied upon or construed on its own without reference to the information memorandum. This marketing document is not a prospectus as defined in the SFA and accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. This document has not been registered as a prospectus by MAS, and the offer of the shares is made pursuant to the exemptions under Sections 304 and 305 of the SFA. Accordingly, the shares may not be offered or sold, nor may the shares be the subject of an invitation for subscription or purchase, nor may this marketing document or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of the shares be circulated or distributed, whether directly or indirectly, to any person in Singapore other than under exemptions provided in the SFA for offers made (a) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 304 of the SFA, (b) to a relevant person (as defined in Section 305(5) of the SFA), or any person pursuant to an offer referred to in Section 305(2) of the SFA, and in accordance with the conditions specified in Section 305 of the SFA or (c) otherwise pursuant to, and in accordance with, the conditions of any other applicable provision of the SFA. Where the shares are acquired by persons who are relevant persons specified in Section 305A of the SFA, namely: (a)  A corporation (which is not an accredited investor (as defined in Section 4A of the SFA) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b)  A trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, the shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 305 of the SFA except: (1)   to an institutional investor or to a relevant person as defined in Section 305(5) of the SFA, or which arises from an offer referred to in v`Section 275(1A) of the SFA (in the case of that corporation) or Section 305A(3)(i)(B) of the SFA  (in the case of that trust); (2)  Where no consideration is or will be given for the transfer; (3)  Where the transfer is by operation of law; (4)  As specified in Section 305A(5) of the SFA; or (5)  As specified in Regulation 36 of the Securities and Futures (Offers of Investments) (Collective Investment Schemes) Regulations 2005 of Singapore.

Japan: This communication provides information relating to a fund known as Merian Global Equity Absolute Return Fund (the “Fund”), which is a sub-fund of Merian Global Investors Series plc. This communication is issued by Merian Global Investors (Asia Pacific) Limited. Merian Global Investors (Asia Pacific) Limited is not licensed to carry out regulated activities in Japan and this communication is issued solely upon the specific request by investors. This communication has been prepared for general information only and is not intended to be, nor should it be construed or used as an offer to sell, or a solicitation of any offer to buy, interest in the Fund. It does not purport to be all-inclusive or contain all of the information which a proposed investor may require in order to make a decision as to whether to invest in the Fund. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient’s individual circumstances or otherwise constitutes a personal recommendation. The offering document of the Fund should be read for further details including the risk factors.

The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments.

Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus.

 

Americas

US Non-Resident / Accredited Investors & LatAm: For Professional investors only. Not for Dissemination or Distribution to US Persons.

Past performance is not a guide to future performance and may not be repeated. Investment involves risk. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. Because of this, an investor is not certain to make a profit on an investment and may lose money.  Exchange rates may cause the value of overseas investments to rise or fall.

This communication is issued by Merian Global Investors (UK) Limited (“Merian Global Investors”), Millennium Bridge House, 2 Lambeth Hill, London, United Kingdom, EC4P 4WR. Merian Global Investors is registered in England and Wales (number: 02949554) and is authorised and regulated by the Financial Conduct Authority (FRN: 171847).

This communication provides information relating to Merian Global Equity Absolute Return Fund (the “Fund”), which is a sub-fund of Merian Global Investors Series plc. Merian Global Investors Series plc is an investment company with variable capital established as an umbrella fund with segregated liability between sub-funds which is authorised and regulated by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended. Registered in Ireland under registration number 271517. Registered office: 33 Sir John Rogerson’s Quay, Dublin 2, Ireland.

Merian Global Investors uses all reasonable skill and care in compiling the information in this communication which is accurate only on the date of this communication. You should not rely upon the information in this communication in making investment decisions. Nothing in this communication constitutes advice or personal recommendation.

Merian Global Investors Series Plc is not registered as an investment company in the United States under the U.S. Investment Company Act of 1940, as amended, and its shares are not registered under the U.S Securities Act of 1933, as amended (“Securities Act”). Shares of Merian Global Investors Series plc Funds funds are not available for purchase by “US Persons” as that term is defined under Regulation S of the Securities Act.  Under certain circumstances shares may be purchased by persons that reside in the United States that are “accredited investors” as that term is defined in Rule 501(a) of Regulation D, as promulgated pursuant to the Securities Act. The information contained in this document is not intended to be an offer of shares and is for informational purposes only.  The information provided in this document is not intended for distribution to, or use by, any person or entity in the United States, unless such person is an accredited investor and can reasonably verify their status as such, or in any jurisdiction or country where such distribution or use would be contrary to law or regulation, or which would subject any of the funds described herein, any member of the Merian Global Investors Group or any of their products or services to any registration, licensing or other authorisation requirement within such jurisdiction or country. This communication is only intended for and will only be distributed to persons resident in jurisdictions where such distribution or availability would not be contrary to local laws or regulations. In particular, the shares are not for distribution in the US or to US persons, unless such person is an accredited investor and can reasonably verify their accredited investor status. 

The Fund may be more than 35% invested in Government and public securities. These can be issued by other countries and Governments. Your attention is drawn to the stated investment policy which is set out in the Fund’s prospectus.

 

RELATED ARTICLES
Loading....
RELATED WEBCAST
Loading....%