Latest media releases


UBS Global Asset Management Launches US Fundamental Equity Market Neutral Strategy

Chicago | | Media Releases Americas

UBS Global Asset Management today announced the recent launch of its new US Fundamental Equity Market Neutral strategy. It is one of a relative few market neutral strategies based on fundamental analysis.

"This is a fairly unique market neutral strategy as all of the holdings in the portfolio are selected based on fundamental, not quantitative, analysis," said Ian McIntosh, Portfolio Manager for the Systemic Alpha team. "We expect 85% or more of the portfolio's active risk to come from security selection. We have minimized many of the factors used by quantitative managers, who comprise the vast majority of managers in this investment space."

The portfolio is market, sector and factor neutral. It is broadly diversified, typically holding 100 to 150 long positions and 100 to 200 short positions. The strategy offers monthly liquidity and has no lock-up period.

The strategy seeks to provide annual returns of 500 to1000 basis points above the three-month US Treasury bills over a full market cycle, gross of fees, with an expected annual ex-ante volatility of less than 10%.

The strategy is built on the firm's fundamental Core/Value equity research platform, which has used the same disciplined investment philosophy to identify under- and overvalued securities for the past 26 years. An advanced, proprietary portfolio optimization application developed by the Systemic Alpha team is used to integrate stock selection, assess risk and trading costs, and to help the manager construct the portfolio.

"We want to make sure investors differentiate the new UBS US Fundamental Equity Market Neutral strategy from UBS O'Connor's Global Fundamental Market Neutral Long/Short strategy that they've successfully managed since 2003 and currently has limited availability," said Scott Bondurant, Global Head of Equity Long/Short Strategies. "We think we have a strong fundamental platform to build on. We hope to have as much success in the fundamental market neutral space as our colleagues at O'Connor, who operate independently within UBS Global Asset Management."

UBS Global Asset Management is also launching the US Fundamental Equity Market Neutral Plus MSCI World Equity strategy, as well. This strategy ports the alpha from the US Fundamental Equity Market Neutral strategy onto the MSCI World Index, enabling investors the opportunity to obtain the combination of the alpha from the market neutral strategy and the return of the MSCI Equity Index.

"This is an exciting evolution in the use of the firm's alpha generation capabilities," said Scott Bondurant, Global Head of Equity Long/Short Strategies. "We believe that the US Fundamental Equity Market Neutral strategy is differentiated from most other strategies in the market neutral space as our fundamental, forward-looking estimates contrast with the multi-factor techniques employed by quantitative managers."

UBS Global Asset Management is one of the world's leading asset managers, providing traditional, alternative and real estate investment management solutions to private clients, financial intermediaries and institutional investors worldwide. Invested assets totaled some CHF 765 billion (EUR 488 billion, GBP 388 billion, USD 770 billion*) at 31 March 2008, making the firm one of the largest global institutional asset managers, a leading fund house in Europe and the largest mutual fund manager in Switzerland .

With over 3,900 employees, located in 25 countries, UBS Global Asset Management is a truly global firm. The main offices are in Basel, Chicago, Frankfurt, Grand Cayman, Hartford, Hong Kong, London, Luxembourg, New York, Paris, Rio de Janeiro, Sydney, Tokyo, Toronto and Zurich.

*Assets under management are representative of the UBS Global Asset Management business group worldwide. Assets under management for UBS Global Asset Management (Americas) Inc. total USD 167 billion as of March 31, 2008.

A number of the comments in this document are based on current expectations and are considered "forward-looking statements." Actual future results, however, may prove to be different from expectations. The opinions expressed are a reflection of UBS Global Asset Management's best judgment at the time this release is compiled, and any obligation to update or alter forward-looking statement as a result of new information, future events, or otherwise is disclaimed. Investors should also be aware that past performance is not necessarily a guide to future performance. Potential for profit is accompanied by the possibility of loss.

¹ Source: Lipper FundFlows Insight Report (as at 31 March 2008)