Hasley Investment Management is to launch a fund next week that will attempt to track the upside of market movements while eliminating the downside.
The Way Hasley Global Momentum fund will invest in a portfolio of 15 equally weighted exchange traded funds which invest in developed market equities. It will also employ several momentum-based mathematical rules which will trigger a shift into cash if markets start falling.
Professors Andrew Clare and Stephen Thomas, both directors of the Centre for Asset Management Research at Cass Business School in the City, are advisers to the fund. The portfolio’s design is based on their academic work and they have helped seed the fund with their own savings. If the fund is successful a multi-asset version will be launched. (article continues below)
“If you’re going to invest passively you’re always going to track [the index] down,” says Clare.
Backtesting shows that the new design would have performed well in earlier historical periods. However, Clare concedes the fund is likely to underperform sometimes over short periods and there is no guarantee of future performance.
The fund will be open to investors with a minimum lump sum of £5,000, with subsequent investments from £1,000, or regular savings from £100 per month. It will have an initial charge of up to 5.25% and the total expense ratio for its retail share class will probably be below 1.75%. The trail commission will be 0.5%.