AMP Capital’s Diversified Funds expand tactical allocation opportunities

AMP Capital’s various Diversified Funds will invest in the AMP Capital Global Tactical Asset Allocation Fund (GTAA) from late August 2008 to offer value-add opportunities across a number of investment strategies.

Unlike most traditional asset allocation decisions, for example equities versus bonds, GTAA exploits a broader set of investment opportunities. In addition to decisions on the traditional asset classes, the Fund will be able to make short-term movements into global equity long/ short, bond long/short, global currencies and soon to be available commodities long/short.

AMP Capital Investors senior investment strategist, Nader Naeimi, said while market returns are expected to be constrained in the coming months, volatility is likely to remain on par with the bull market experience and therefore GTAA offers a robust framework for exploiting global alpha opportunities.

“In this environment, GTAA’s alpha potential can be a significant proportion of funds’ total return. Range bound markets with significant volatility offer excellent opportunities for generating alpha through tactical asset allocation and our analysis shows that the expanded universe greatly improves the overall likelihood of delivering outperformance,” Naeimi said.

When determining strategic weights, each major equity market is analysed on the basis of valuations, earnings, liquidity and sentiment. Likewise, each major bond market is analysed on the basis of valuations, cyclical considerations and the monetary policy environment. The selection process combines both quantitative analysis and qualitative considerations and information is then filtered through a proprietary scoring system.

GTAA was launched in September 2005. It is expected that AMP Capital’s Diversified Funds will invest a total of around $500 million in the Fund, approximately 2 to 3% of the total of the Diversified Funds’ funds under management.

 

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Find more information on the Diversified Funds.

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