Amundi announces the launch of Amundi Funds Multimanagers Long/Short Equity, a new sub-fund of its Luxembourg-domiciled umbrella fund (SICAV), Amundi Funds. This sub-fund invests in UCITS III funds employing long/short and/or equity arbitrage strategies, as well as volatility management.

Amundi wishes to offer investors access to these sophisticated investment strategies, formerly the preserve of alternative investment funds, within a fund complying with the European UCITS III directive.

Amundi Funds Multimanagers Long/Short Equity aims to outperform Eonia by 5% [1] p.a. while maintaining a maximum level of annual ex-post volatility of 8%.

The current environment of low interest rates, economic uncertainty and high volatility is particularly favourable for absolute return strategies, which aim to capitalise on the divergence in performance between securities, sectors or geographic regions rather than on global market trends.

Amundi Funds Multimanagers Long/Short Equity is managed by Amundi Alternative Investments using a disciplined and rigorous process. Each of the three phases of the process represents a source of added value for investors:.

 Phase 1: analysis, fund selection and due diligence
As the investment universe is complex, highly diversified and fast-growing, the selection requires specific expertise. The portfolio manager relies on Amundi Alternative Investments’ highly experienced analysts for analysis, fund selection and due diligence. The sub-fund’s investment universe is comprised of the best absolute return specialist managers.

 Phase 2: portfolio construction and management
On the back of the results of the fund selection process, the manager constructs the portfolio using a top-down approach, taking into account the outlook and forecasts of Amundi’s economists and strategists [2]. The portfolio is then optimised by adjusting allocations according to the Investment Committee’s views and the predefined constraints of the portfolio. The investment process aims to reduce the investment risk significantly by diversifying the underlying funds, sub-strategies, investment styles, sectors and geographic exposures.

 Phase 3: protection against extreme risks
In times of market stress, when all asset classes can suffer indiscriminately and when volatility tends to increase significantly, the fund manager can allocate up to 10% [3] of the sub-fund’s assets to volatility strategies. The aim of this allocation option is to provide further diversification, moderate the portfolio’s correlation to equities and offset the impact of market downturns.

As well as incorporating stringent investment and risk management constraints, in compliance with UCITS III regulations, Amundi Funds Multimanagers Long/Short Equity offers investors weekly liquidity, a feature which is significantly more favourable than the monthly or even quarterly liquidity typically provided by alternative investment funds.