e-fundresearch.com: How many positions does the portfolio usually contain and what is the average holding period of an investment?
Fabrizio Viola: The Fund is unconstrained in terms of number of positions and holding period, except regulatory requirements of course. We constantly monitor macro variables that could derail our investment proposition in any particular moment in time. In any case, cash positions, in particular the ones with the highest beta, would see less turnover (conviction buy). We have been authorized by the Luxembourg regulator to trade credit derivatives and other type of derivatives, that we use to tactically adjust the risk profile of the fund (overlay strategies, more short term oriented).
e-fundresearch.com: To which extent does fund size impact the efficiency and effectiveness of your investment strategy?
Fabrizio Viola: This is a good question, but normally such diseconomies start to appear when the fund size is really very big, i.e. exceeding three or four billion Euro. This is not the case by now.
e-fundresearch.com: In which market environment does your investment strategy deliver the best (relative) results?
Fabrizio Viola: Being absolute return, our strategy is targeted at providing investors with a decent capital appreciation along with a controlled volatility. This means that the portfolio managers have to apply both stop-loss and stop-gain mechanisms, capping even favorable trends if necessary. If markets are very strong, those strategy tends to fall behind, while on the contrary, when markets are very weak, those funds tend to protect investors’ capital as much as possible.
e-fundresearch.com: Which benchmark is most relevant and how should investors compare the fund vs. benchmarks or peer groups?
Fabrizio Viola: Eonia capitalized. The peer group has to be identified among all other funds with an absolute return attitude and a focus on global credits.
e-fundresearch.com: Which performance did you achieve for the fund YTD and over the past five calendar years in absolute terms and relative to relevant benchmark or other reference indices?
Fabrizio Viola: As stated above, the fund had been totally reshaped before being reactivated in mid-May 2014. So this is the relevant date from when to analyze and calculate absolute and relative performances.
e-fundresearch.com: Thank you!