Fees
By utilitising the in-house quantitative strategy, the latest OCF of the fund is 1.29% (Class A), lower than the peer average of approximately 2%.
Management
The fund has been managed by Frankfurt-based Michael Fraikin since 2005. He is head of the portfolio management team, responsible for business development, risk control and investment communication.
The other manager is Thorsten Paarmann, who began co-managing the fund in 2014. He is also based in Frankfurt and is responsible for business development, risk control and investment communication.
The managers, as mentioned before, follow the quant strategy and are not stock–pickers. “They do monitor the performance of the quant strategy and adjust or modify accordingly to make the optimisation better,” Ng said.
Conclusion
Instead of using a traditional method to pick stocks and build a portfolio, the fund attempts to quantify all the input and run with the built-in optimisation process in order to come up with a diversified portfolio unconstrained by the benchmark, Ng said.
Due to its quant style, the fund may be more difficult to understand than most peer funds, Ng said.
“However, the method should be able to deliver similar returns as the international equities sector but with lower price swings, thanks to the volatility-focused optimisation process.”
That said, the fund is highly diversified in order to maintain low volatility. It does not take aggressive bets on sectors or geographies. “Therefore investors should not expect it to significantly outperform the market in long run,” Ng said.
