Trend-following has now become a well-understood alternative investment style which is viewed as favourable while risk premia has become part of investing jargon, according to Morningstar’s Sector Wrap-Up for Alternative Funds.

However, the way the strategies are adopting this trend significantly varied, the firm said.

According to Morningstar’s sector wrap-up, two strategies, including CFM Institutional Systematic Diversified and Aspect Diversified Futures, were upgraded to bronze from neutral.

Morningstar also initiated coverage of JPMorgan Global Macro Opportunities at a bronze rating and Ironbark LHP Global Long/Short at a neutral rating while dropped coverage of Ironbark Gavekal Asian Opportunities.

Also, it allocated one alternative strategy the second-highest-possible analyst rating of silver, Winton Global Alpha while further seven were rated bronze, the firm said.

At the same time, the study found that the concept of risk premia began to enter ‘common parlance in the alternatives space’ however it saw managers taking different approaches to risk premia investing as it lacked one universal definition.

According to Morningstar, the term referred to a set of strategies that offered source of systematic returns, grounded in fundamental economic principles, with three dominant rationales explaining the existence of risk premia opportunities which included behavioural biases, structural market inefficiencies, or compensation for bearing risk.

Please enter your details below. The ISTrends Fund Fact Sheet will be sent to your nominated email address


* Required
CAPITAL FUND MANAGEMENT LLP (CFM)
The products, information and other material contained on this website are only directed at investment professionals in Australia. Please note that you will be prevented from purchasing or dealing if you are not eligible for products and services offered within this site. Materials contained within this website have been made available for information purposes only. It does not contain any investment recommendations nor provide investment advice. Neither CFM nor its related entities, directors or officers guarantee the performance of, or the the repayment of capital or income invested. Past performance is not necessarily indicative of future performance. Pursuant to ASIC Class Order 03/1099, CFM LLP, the Investment Manager of the Fund, is exempt from the requirement to hold an AFSL under the Corporations Act. CFM LLP is regulated by the UK Financial Conduct Authority ("FCA") under United Kingdom laws which differ from Australian laws. These financial services are provided only to wholesale clients as defined in subsection 761G(7) of the Act. The information on this website has been prepared on this basis and is for the use of wholesale clients only. It is in no way intended for use by retail clients and should not be distributed to or relied upon by a retail client.
TERMS & CONDITIONS
What is a financial services licensee? A person or entity is a financial services licensee if they hold an Australia financial services licence issued pursuant to the Corporations Act 2001
BY CLICKING ON 'I AGREE', I DECLARE I AM A FINANCIAL SERVICES LICENSEE AS DEFINED IN THE CORPORATION ACT 2001.