7IM launches Quantitative Building Block Funds

Seven Investment Management (7IM) has launched two Quantitative Building Block Funds, aiming to improve diversification and portfolio resilience across its model portfolio and fund ranges.

The funds were developed in partnership with JPM Mansart, with the range comprising the Core Quantitative Investment Strategies (QIS) Fund and the Diversified Alternative Strategies (DAS) Fund.

Advisers and their clients will be able to access a diversified basket of alternative investment strategies through the funds.

7IM said the launch marked the next stage in its process to update its investment solutions, aiming to bring quantitative investing techniques traditionally associated with institutional investors into portfolios used by financial advisers and their clients.

It added that both funds use data-driven investment approaches and focus on strategies that looks to generate returns in a variety of market conditions.

Several key investment principles were used to construct the funds, including low correlation to traditional asset classes, transparency, daily liquidity and cost efficiency.

The Core QIS Fund utilises a more defensive approach, combining a variety of alternative investment techniques to target returns above cash over the long term, while reducing dependence on traditional markets.

Meanwhile, the DAS Fund offers wider exposure to alternative return opportunities as it seeks greater long-term growth potential while maintaining diversification.

Both funds target volatility of 5 per cent to 7 per cent, and are used in 7IM’s funds and model portfolio solutions.

"The introduction of the Quantitative Building Block Funds is another example of how we are continually evolving our portfolios to improve client outcomes,” commented 7IM co-chief investment officer, Shanti Kelemen.

“By combining sophisticated quantitative alternative strategies with the simplicity, transparency and liquidity advisers require, we believe these funds can play an important role in delivering more resilient portfolios and better long-term risk-adjusted returns for investors.

“For years, investors have been told they need alternatives, but too often those alternatives have simply been different ways of owning economic growth. Property, infrastructure and even private markets can still be heavily influenced by the same forces that drive equity and bond markets.

“What investors really need are genuinely differentiated return streams. Quantitative market-neutral strategies offer the potential to generate returns from entirely different sources, while maintaining the liquidity, transparency and cost efficiency that advisers increasingly demand."

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