Man TargetRisk Global Equities

Man TargetRisk Global Equities seeks to improve the outcome of investing in equities by applying sophisticated risk management techniques to an optimal portfolio of cash equities.
 
  • Experience – benefiting from over 30 years investment experience, combining the expertise from Man Group’s quantitative investment engines
  • Track Record – builds on Man’s established TargetRisk programme. This tried and tested framework has a live track record since 2014 and AUM over $14bn1 in various global versions
  • Diversification - portfolio combines two concepts: one focused on seeking low beta stocks and the other focused on identifying stocks that have low correlation
  • Risk management – utilises a basket of highly liquid equity futures to mitigate against tail risk characteristics

1. As at 31 March 2023

Approach

Man TargetRisk Global Equities programme is a systematic equity focused Strategy in which Man Group applies its advanced techniques in alternatives and long-only investment. The Strategy seeks to achieve medium-term capital growth by allocating capital to a portfolio of equities which aims to match the beta of global equities on average through time.

The Strategy's proprietary risk management process works to reduce portfolio exposure via a basket of futures contracts during times of heightened market stress.

The portfolio comprises of two main components:

  • Long only equity – a diversified, risk-aware, global equity portfolio that is highly diversified and aims for a bias towards low-beta stocks, with the aim of delivering market returns with a lower volatility than the market. the portfolio combines two concepts: one focused on seeking low beta stocks and the other focused on identifying stocks that have low correlation to each other.
  • Risk Overlay – dynamically manages the market exposure of the portfolio to control downside risk, managed via short liquid equity index futures. The overlays will not always be active and therefore there will be times when there is no short exposure. Additionally, when active, the risk overlay will not always match the regional split of the entire global equity portfolio, utilising regional specific futures to reduce risk only in those regions where the overlay triggers have been met.
 

How we risk-manage equity portfolios in an effort to generate superior returns2:

How we risk-manage equity portfolios in an effort to generate superior returns

2. Schematic illustration.

Manager(s)

Richard Barclay
Richard Barclay
Head of Product and Multi-Strategy Solutions, Man Group

Investment Solutions

Man offers a comprehensive suite of investment solutions and formats that can be tailored and optimised to meet specific client needs.
Our investment solutions offer optionality including: liquidity, control, investment restrictions, investor customisations and transparency.

UCITS
Alternative investment funds
US 40 ACT
Regional funds
Separate accounts
Advisory mandates
Managed accounts

Access to investment products and mandate solutions are subject applicable laws and regulations including selling restrictions and licensing requirements. Investment solutions listed above may not be compatible for all investment strategies and may be subject to minimum subscription requirements. Regional Funds: In additions to UCITS and AIFs registered across the EEA, a number of investment strategies are available in vehicles registered in Chile, Netherlands, Hong Kong, Japan, Singapore, South Korea and Switzerland.

View our strategies

Considerations

One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:

Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.

Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.

Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.

Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.

Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..

Financial Derivatives - The Strategy will invest financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) to achieve its investment objective. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The extensive use of FDI may significantly multiply the gains or losses.

Leverage - The Strategy's use of FDI may result in increased leverage which may lead to significant losses.

Model and Data Risk - The Investment Manager relies on quantitative trading models and data supplied by third parties. If models or data prove to be incorrect or incomplete, the Strategy may be exposed to potential losses. Models can be affected by unforeseen market disruptions and/or government or regulatory intervention, leading to potential losses.