Armstrong taps inflation fears with first fund
LONDON (Reuters) - Armstrong Investment Management, the boutique headed by husband-and-wife team Patrick and Dr Ana Cukic Armstrong, is launching its first product, seeking to tap into investor concerns over the prospect of rising inflation.
The Armstrongs, previously co-heads of Lloyds (LLOY.L) unit Insight's multi-asset group, have managed money together for over nine years, building products at UBS (UBSN.VX) and Insight.
The multi-asset Diversified Dynamic Solution fund, their firm's first and flagship offering, will try to deliver an average total return of at least euro zone CPI plus 7 percent per annum over a seven year cycle.
"In the past these types of products have tried to beat a cash rate but now clients really want products that can outperform inflation," said Ana Cukic Armstrong.
She said money supply in the UK and U.S. was growing much faster than the official numbers implied. "It looks like there might be more inflation in the system than expected."
Investors have started to worry that the huge money-printing that central banks have undergone as part of their quantative easing programmes will devalue currencies, lifting inflation.
The Dublin-domiciled fund will invest across a range of asset classes and combine direct investment in equities, bonds, currencies, derivatives and exchange traded funds with allocations to some external specialist funds to try and make money in both falling and rising markets.
It will be targeted at family offices, high net worth individuals and small and mid-sized pension funds, principally in Europe. There are plans to launch a version for retail investors before the end of the year.
The opening position is to short sterling and the dollar against the euro and the Swiss franc, and to play investment themes such as precious metals, agriculture, water and infrastructure stocks. The weighting of the model portfolio is currently 32 percent to commodities, 36 percent to credit and 11.8 percent to equities.
As this fund is a low volatility product, Armstrong said the next launch would probably be something with higher volatility and less liquidity.
