Investment Solutions

Challenger Liquid Alternatives Balanced Fund

Strategy

The Challenger Liquid Alternative Balanced Fund seeks to build a portfolio of Alternative Risk Premia strategies in order to deliver positive absolute returns in excess of cash regardless of market environment. The Solutions team uses quantitative and qualitative analysis to identify and invest in the risk premia they believe will provide clients with consistent returns with low correlation to outright market direction.

The Fund is available to institutional clients (as defined in the Corporations Act 2001) only.

Alternative Risk Premia Approach

The Solutions team’s investment philosophy is based on the belief that:

  • Alternative risk premia (ARP) provide diversified sources of return which complement more traditional asset class exposures; and
  • Combining multiple strategies into a single portfolio leads to more consistent risk and return outcomes.

The team’s approach is to identify, isolate and then ‘harvest’ the returns from multiple risk premia using systematic strategies, rather than trying to time the returns from individual risk premia. The team invests in risk premia spanning a broad universe of style, asset class and behaviour which tend to have low correlation to each other and to broad macro factors. These diversification benefits are used to produce portfolios with enhanced risk adjusted returns. The resultant portfolios have very low correlation to traditional asset classes and macro factors.

Suits Investors Seeking:

  • Absolute Return: The Fund targets positive absolute returns regardless of the market environment.
  • Diversification:  The Fund tends to have low correlation to other asset classes and traditional investment products. Even relatively small allocations to the Fund can enhance overall risk adjusted returns at the client portfolio level.
  • Liquidity: The Fund is highly liquid, in contrast to other sources of uncorrelated returns such as hedge funds, infrastructure and property.

Benchmark

RBA Cash Rate Total Return Index

How to Invest:

The Fund is only available to institutional investors (as defined by the Corporations Act 2001).

If you are an Institutional investor and wish to invest in the Fund, please contact:

Linda Mead
Senior Institutional Business Development Manager
Fixed Income, CIP Asset Management

P: (+61) 2 9994 7867
E: lmead@challenger.com.au