Acuity launches 130/30 pooled fund

Date: Tuesday, June 3, 2008
Author: Investment Executive

Fund helps investors benefit from long and short strategies in single solution:

Acuity Funds Ltd. has launched a new pooled fund that harnesses the power of long and short strategies in a single investment solution. Acuity Pooled 130/30 Fund is designed to help investors maximize return potential in up markets and protect assets in down markets.

“We want to help investors diversify not only by asset class, sector and region, but also by removing the biggest constraint that most portfolio managers have, which is an inability to add value in names that they don’t like,” says Hugh McCauley, managing director, lead portfolio manager. “The Acuity Pooled 130/30 Fund is a natural extension of a long-only equity strategy, and a logical complement to traditional equity portfolios.”

In managing the fund, Acuity selects stocks with exceptional upside potential, as well as those with the potential to experience a downturn. An initial 100% long position is augmented by a 30% short position, then the proceeds of the short position are reinvested in additional long position.

As a result of this strategy, “Investors effectively receive 160% exposure to our very best buy and sell ideas. Unlike a long-only fund, our investment management team is able to act on both upside and downside expectations, giving us a much broader set of opportunities,” says McCauley.

“The risk/return advantages of 130/30 investing has made this strategy popular among large institutional investors,” adds Stephen Crawford, senior vp, national sales. “We are now pleased to offer individual investors an opportunity to benefit from this powerful strategy.”

Using a team approach, Toronto-based Acuity manages approximately $9.2 billion in assets on behalf of Acuity Mutual Funds, Acuity SRI Funds, Acuity Pooled Funds, Acuity Alpha Managed Portfolios, closed end funds, pension, institutional and private portfolios.