Diversified, Liquid, Low Cost
Frontier’s Global Hedge Fund is an innovative and unique fund, designed to deliver the returns of the global hedge fund industry with a single investment. Consistent with Frontier Capital’s low cost, diversified approach to investing, the Fund addresses many of the issues associated with the hedge fund industry by providing twice per month liquidity with 5 days notice, no lock-ups and no redemption penalties.
The fund combines holdings in over 60 single manager hedge funds with exposure to liquid synthetic hedge fund replication products.
Single manager hedge funds are selected after passing extensive quantitative filtering as well as qualitative due diligence. These hedge funds represent a “stratified” sample of a proprietary database of over 20,000 hedge funds and mirror the investment strategies and three other key return drivers of the global hedge fund industry: geographical region of investment, life cycle and fund size. All funds are held in equal weighted proportion1 to minimise single manager fund risk. Synthetic replication products trade liquid instruments such as futures, listed options and ETFs in a manner that generates a combined return stream similar to that for hedge funds as a whole. They are an effective mechanism for replicating most traditional beta and alternative beta sources of hedge fund returns.
Mapping the Hedge Fund Industry: Frontier Proprietary Stratified Sampling Process
Global Hedge uses synthetic replication products to provide enhanced liquidity and to reduce industry tracking costs. Frontier has found that a blend of the different synthetic replication approaches can reduce tracking error and minimises risk.
The combination of single managers and synthetic replication allows Global Hedge to capture the attractive risk-adjusted return characteristics of hedge funds in a highly efficient manner, with enhanced liquidity and minimised single fund risk compared to traditional fund of hedge funds.
For more information on Global Hedge please contact us or visit our Investor Centre.