Odey Absolute Return

Investment Objective

The fund aims to achieve a positive absolute return over a 12 month period independent of market conditions. The fund will seek to achieve its investment objective by investing in or taking exposures (using both long and synthetic short positions) to a range of asset classes worldwide. The fund may therefore invest in any, or all, of the following: equities and equity related securities (including OTC derivatives), fixed and/or floating rate debt securities issued by governments and/or corporate entities, closed ended funds, collective investment schemes, derivatives, forward foreign exchange contracts, currencies and cash and cash equivalents.

Reference Index

Primary: Cash; Secondary: MSCI World

Latest Meeting Note

Fund Update 29 Jan 2020

The Odey Absolute Return fund recorded an impressive Q4, returning 17.3% whilst being broadly market neutral, with the long book driving performance and generating significant alpha. The exceptional quarter in the long book was driven by... Read more

The Odey Absolute Return fund recorded an impressive Q4, returning 17.3% whilst being broadly market neutral, with the long book driving performance and generating significant alpha. The exceptional quarter in the long book was driven by a combination of stock specific and thematic factors. There was strong performance in well documented names such as Sports Direct (now Frasers Group), as it delivered results which were materially better than market expecations, and Plus500, which has demonstrated how well it is adapting and arguably benefitting from the new regulatory environment. Throughout the year and particularly relevant across Q4 was the fund’s overweight positioning towards the UK domestic space, driven by attractive bottom up valuations. The resounding Conservative majority and the subsequent rally in UK assets provided the basis for the funds 10.1% return in December, with the team believing the election result has laid the foundation for a multi-year period of outperformance in UK assets. The fund’s current biggest factor risk is long UK domestic assets with approximately 45-50% net underlying exposure to the fund, with 46% of the fund risk being idiosyncratic stock risk. On the short side, the fund had a relatively disappointing year after strong short alpha generation over the previous three years, though overall short losses must be considered in the context of last year’s market environment of a global, synchronized monetary policy supported equity rally. In terms of global outlook, the manager’s macro views see there to be a shift from monetary to fiscal stimulus, with rising rates one of the biggest risks to asset prices. In light of this and driven by bottom up valuations, the portfolio has moved to have more of a value bias (due to value traditionally being less exposed to rising rates).

Performance

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD
2019 0.5 0.7 0.9 0.7 0.5 0.3 0.3 0.4 0.8 0.7 0.7 0.2 0.3
2018 0.7 0.3 0.5 0.2 0.6 0.5 0.1 0.1 0.4 0.5 0.3 0.8 0.1

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Close Current Site Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.