MERIAN
STRATEGIC ABSOLUTE RETURN BOND FUND

Fixed income investing in a changing world.

TO GENERATE RETURNS IN FIXED INCOME YOU NEED TO DO SOMETHING DIFFERENT

STEP-BY-STEP INVESTMENT PROCESS
GLOBAL MACRO THEMES

Portfolio managers determine top-down views on global macro

Co-managers determine strategic (six months) and tactical (one month) asset allocation

INVESTMENT IDEA GENERATION

“Best ideas” list across the asset classes with support from sector specialists

15-person specialist team (covering macro, EMD and credit) determine country and corporate selection to populate a) the live asset allocation and b) the stand-alone idiosyncratic ideas

PORTFOLIO CONSTRUCTION

Portfolio managers determine fund level of ex-ante risk, sector asset allocation and individual position risk weights

Risk budgeting process derives from conviction levels of PMs. Process done weekly to produce model portfolio

MODEL PORTFOLIO DETERMINED

Team strategy aligned with quantitative methodology – provides position sizes as a guide for the fund managers

Model portfolio used as a guide for fund constitution for live portfolio

WHAT WE DO DIFFERENTLY RISK MANAGEMENT COMES FIRST

All importantly, risk allocation is the very starting point of the team’s investment process. Portfolio construction then revolves around the model portfolio, with best ideas scaled for conviction, volatility and correlation.

In today’s market, a long-only approach to fixed income is ineffective, so the team continually tweak the portfolio to reflect the underlying macro environment.

WHAT WE DO DIFFERENTLY LOW CREDIT EXPOSURE AND HIGH LIQUIDITY

The strategy sacrifices carry earned via a heavy corporate bond allocation; this provides valuable liquidity and flexibility. The fund does not take part in private placements.

All data from Bloomberg as at 14/08/19. The five peer funds were chosen for means of comparison as they are the largest genuine absolute return funds in the Alternatives peer group.

WHAT WE DO DIFFERENTLY SIGNIFICANTLY LOWER VOLATILITY THAN THE MARKET

All data from Bloomberg as at 14/08/19. * On 25/05/2017, the fund’s benchmark changed from the JP Morgan Global Government Bond Index USD hedged, to cash (USD – Fed Funds Overnight Rate).

THE TEAM
Mark Nash

FUND MANAGER

Mark is a Fund Manager in the Fixed Income team.

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