Low Correlation Strategy Trust

The Low Correlation Strategy Trust is designed to offer an attractive risk-return profile in its own right that is complementary to traditional equity/bond biased portfolios. It does this by investing in a range of liquid alternatives strategies, including hedge funds and uncorrelated risk premiums.

JANA Select Opportunities Trust

The JANA Select Opportunities Trust invests predominantly in a diversified portfolio of alternative strategies. It is designed to provide investors with a diversified source of returns to complement traditional asset class exposures in a typical diversified fund. Asset classes may include shares, bonds, credit, currency, commodities and listed property in addition to non-traditional asset classes such as listed infrastructure and hedge funds.

The charts below provide information on the strategies into which the above trusts may invest.

Efficient beta

This multi-asset strategy aims to provide a more consistent pattern of returns than a traditional balanced fund. The strategy invests in mainstream asset classes and uses a small amount of leverage to increase the return potential from less volatile asset classes. It is a lower cost strategy than many other alternative strategies. This strategy is used in portfolios to reduce reliance on shares for long-term growth.

Global infrastructure (currency hedged)

The strategy invests in listed companies whose business is the ownership, operation and maintenance of infrastructure assets such as energy grids and telecommunications networks. As infrastructure assets are often highly regulated monopolies, their revenue streams tends to be more regular and stable than traditional shares. As a result, the strategy has the potential to generate total returns that:

  • are less volatile and tend to be considered more defensive than the broader listed share market
  • generally have low correlation with mainstream asset classes and
  • can provide a long-term hedge against inflation.

The strategy aims to provide regular and stable income plus capital growth with a focus on minimising the volatility of returns.

JANA Extended credit strategy

A portfolio of high yielding fixed income securities that have a credit quality rating below ‘BBB’ (i.e. non-investment grade). These securities usually pay higher rates of interest because they have a higher risk of default than investment grade bonds.

The portfolio invests in extended credit to capture the expected long-term premium paid for investing in securities with higher risk of default. The portfolio aims to provide exposure to this credit risk with minimal exposure to interest rate (duration) risk. High yield bonds tend to perform well at times of credit expansion and strong economic growth.

The portfolio may include:

  • global high yield bonds – fixed rate bonds
  • bank loans – floating rate bonds that are secured over assets of the company and are therefore expected to provide superior capital protection to high yield bonds which are typically unsecured and
  • mortgages – bonds that use property as security.

Global absolute return bonds

These are flexible strategies where managers have discretion to invest across a broad spectrum of bonds and currencies to achieve a higher return than cash. These investments provide a low risk diversifier to traditional fixed income securities providing some protection from rising interest rates.