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German firm confirms fund expansion in Switzerland

German firm confirms fund expansion in Switzerland

LOYS' Global Long/Short fund will be launching a Swiss share class within the next few weeks, Citywire Switzerland can confirm.

Citywire AAA-rated Ufuk Boydak, managing partner at the German firm, said this launch comes following client demand.

'We have a lot of interest from Switzerland. They want it for Swiss investors, but do not want to take the currency risk,' he said. 

Boydak noted that LOYS' long-only funds are already popular among Swiss investors. 

'LOYS Global System and LOYS Europa System are AAA-rated, and are the engine for the LOYS Global Long/Short fund,' Boydak said. 

According to Citywire data, the LOYS Global Long/Short fund has returned 8.6% over three years and 32% over five years as of May 2018. 

Fund composition

Boydak said the long/short fund is currently worth €520 million (CHF 604 million), with net exposure of about 25%. It allocates no more than 2.5% to any one stock, and primarily invests in sectors with little chance of volatility.

Boydak said: 'It's invested in what you would consider proven industries or proven sectors. You will usually find us where there are no huge disruptive changes.

'It goes to industrials, consumer discretionary, consumer staples, IT, and more or less things that we have confidence in.'

By contrast, he said he avoids the high tech space, because its ever-changing nature makes it too unpredictable. He also avoids 'everything the government is too involved in, the commodities space, and financials that go directly to banking'.

Geopolitical influence

Only 11% of the fund is currently allocated to the UK. According to Boydak, this is higher than it was pre-Brexit.

'The UK has been more interesting for us. Brexit had two positive effects: the pound was weakening, and stocks were weakening. We bought some companies 30% or 40% down.'

He noted that the fund is underweight in the US, which also holds 11% of the fund. 

'Valuation is more expensive because of the premium after the crisis. Europe offers more volatility and more opportunities, but the US is a rock solid performer and has been for the last 10 years. If there's a correction I'd like to own more, but right now we're underweight,' he said.

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