The Merian Global Equity Absolute Return fund follows a long / short market neutral strategy. It aims to achieve positive returns over rolling 12 month periods, irrespective of whether markets are rising or falling and with a low correlation to both equity and bond markets. The fund implements a quantitative investment process, focusing on five main characteristics: dynamic valuation, market dynamics, sustainable growth, analyst sentiment and company management.
The analysis completed feeds into a single return forecast for each stock, and the portfolio construction relies on this input. In addition, the fund managers ensure stringent risk management, which includes strict limits on sector and stock positions.
We like the fund for its robust investment process, and its ability to protect value in falling markets. In addition, it has exhibited low volatility and correlations, which can be attributed to its significantly diversified portfolio.