Managed by James Ind, the fund will use long and short strategies to target a market neutral return.
It will offer accumulation, income, institutional and retail share classes.
Diversified market strategies
The Baring Dynamic Absolute Return Fund will use the expertise of Barings’ strategic policy group to identify both absolute value and relative value opportunities.
Positions will be subject to risk budgeting constraints, with volatility expected to average around 7%. The portfolio will use drawdown controls to limit downside over any given month.
Overall, it is expected that the fund will hold between 10 and 20 diversified market strategies at any given time.
Barings plans to register the fund in Austria, Denmark, Finland, France, Germany, Luxembourg, Norway, Spain, Sweden, Switzerland and the UK.
Market-neutral offering
Ind said: “With a consistent process developed over 13 years, Barings has delivered exceptional multi-asset performance. The demand for absolute return products continues to grow among all client segments. It is a natural step for Barings to develop a more market-neutral offering given its track record of success in asset allocation.
“Investment returns are under significant pressure, with a third of the sovereign bond universe offering negative yields. The need for alternative funds to diversify traditional growth assets is driving significant fund search activity.
“Using top down investment models, the Baring Dynamic Absolute Return Fund will be agnostic as to overall market direction. Use of long and short strategies as well as derivatives will allow the fund to adapt to different market regimes.”
