‘Recommended’ rating adds additional momentum to growth of CFM’s true-to-label Alternative Beta Fund in Australia


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July 17, 2016

Leading independent investment researcher, Lonsec, has awarded Capital Fund Management’s (CFM) Institutional Systematic Diversified Trust (CFM ISDiversified) a “Recommended” rating, adding strong momentum to the Fund’s market debut and solid penetration amongst financial advisers in Australia.

Winston Capital Partners, the local distributor of CFM ISDiversified, said the Lonsec rating was a pleasing win and follows other notable recent milestones.

In addition to the Lonsec rating, the Fund has received a ‘Superior’ rating from independent investment research group SQM Research, and was approved for listing on several investment platforms, including Hub 24 and Netwealth among others.

“Since the fund was launched in Novemeber 2015 it has received  inflows from institutional investors that serve financial advisers,  and had over $37m in FUM at the end of June 2016,” said Stephen Robertson of Winston Capital.

“Winston routinely sees financial advisers who are looking to add alternatives to their model portfolios or actively reviewing their models in search of better solutions. Generally, advisers’ choices for high quality, simple-to-understand, affordable investment solutions have been quite limited, particularly compared with the choices offered to the institutional market,” he said.

Mr Robertson said the entry of high-quality global managers like CFM into the retail space has enabled welcome access for advisers to true-to-label investments with proven track records of delivery against defined risk and return objectives.

The Fund has been designed to offer investors a diversified portfolio of well-known and persistent alternative strategies that can be systematically harvested from markets, but at a fraction of the cost of the typical ‘2 and 20’ model (see note), and with far greater liquidity.

The fund targets zero correlation to equity and bond markets, whilst aiming to deliver returns of cash plus five per cent per annum, with constant volatility of six per cent per annum (over a full investment cycle).

“These important attributes were highlighted in the recent ‘Brexit’ inspired market volatility,” Mr Robertson said.

In awarding the Fund a “Recommended” rating, Lonsec noted that “(CFM) applies a logical and transparent investment process, which is both systematic and repeatable. The strategy is well-conceived from both a philosophical and a quantitative research perspective.” Further, Lonsec noted that “the Fund is managed by a high quality and experienced investment team which has a long and successful heritage in active quantitative hedge fund investing.”

Note: ‘2 and 20’ refers to the typical fee structure for alternative investment products of a two per cent management fee, with a 20 per cent success fee after certain performance hurdles have been met.

Source: Winston Capital Partners


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