The Total Return Group is an autonomous investment division within Finisterre. Having focused primarily on running Hedge Fund strategies, it was a natural progression to launch our long-biased Total Return Group in May 2013. The team includes Damien Buchet who acts as CIO and Portfolio Manager for the Total Return Strategy and Christopher Watson, Portfolio Manager. They are both supported by Arthur Duchon-Doris who is a Junior Portfolio Manager.
Investment objective
The Total Return Strategy (the “Strategy”) aims to deliver income and capital gains while managing liquidity and limiting drawdowns during market crises. The Strategy seeks to offer investors most of the emerging market debt upside with half the volatility and less than half of the drawdowns. It’s a flexible “all-weather” approach designed to deliver an optimal yield-liquidity-volatility profile in any market condition.
Style of investment
The Strategy follows an innovative and well-tested market segmentation and portfolio construction process. It builds performance from a combination of income, potential capital gains from market timing on liquid “momentum” assets and “value opportunities” from bottom-up credit and relative value strategies.
Because the Strategy is not tied to a specific benchmark, Finisterre’s portfolio managers are free to invest according to their strongest convictions. This freedom allows them to take advantage of diversity and changes with the emerging market debt market.
Our differentiators
Finisterre’s experienced EMD total return management team benefits from the support and idea generation of a 15-year-old EMD hedge fund platform. Their innovative portfolio construction process has demonstrated its resilience through many episodes of market turbulence.
Risk management
The team designed the Strategy to maximize yield generation over the market cycle, while managing liquidity and market drawdowns during crises. This provides potential for significantly better risk-adjusted returns than long-only managers can offer.
Regulatory risk warnings
Investing in emerging markets has associated risks including currency risk, confiscatory taxation, nationalization of assets, possibility of expropriation, volatility, liquidity and external factors e.g. war or natural disasters. Derivatives are volatile and carry a high degree of risk, including liquidity risk. Leverage can magnify losses as well as gains. There is no guarantee that the investment objective of the Fund will be achieved. The potential for profit is accompanied by the possibility of loss.
For further information on how to invest, please visit Principal Global Investors
