Toronto-based Aston Hill Asset Management Inc. Friday announced the launch of two new mutual funds. Aston Hill U.S. Growth Fund and Aston Hill Corporate Bond Fund, which was formerly the Build America Investment Grade Bond Fund, are a part of Aston Hill’s effort to provide liquid alternative mutual funds to Canadian investors.
“We are launching these funds in response to advisors seeking non-traditional equity and fixed income strategies that provide investors with a unique risk-reward profile regardless of the market environment,” says Ben Cheng, president and co-chief investment officer.
Aston Hill U.S. Growth Fund aims to achieve long-term capital growth by investing primarily in U.S. equity securities though it may also invest in non-U.S. equity securities to a lesser extent. It combines fundamental equity research with option strategies meant to generate income, enhance returns and provide downside protection. The portfolio manager may also employ shorting strategies, within regulatory limitations, to help reduce volatility. The intent is to have between 80 and 95% of this fund invested in equities.
It will act as a more fully invested, higher-exposure version of Aston Hill’s Capital Growth Fund, which typically allocates between 20% and 70% to risk-free assets, including cash. Jeff Burchell, Aston Hill’s co-chief investment officer, will manage the U.S Growth Fund.
Aston Hill Corporate Bond Fund aims to generate income and the potential for capital appreciation by investing primarily in investment grade Canadian corporate bonds that are rated BBB- or above. It may also invest, to a lesser extent, in other Canadian and non-Canadian issuers of fixed income securities including high yield corporate debt, floating rate notes, bank loans, convertible debentures, bonds backed by mortgages and other income securities.
The fund will employ alternative investing strategies, including derivatives and shorting, within regulatory limitations. It will be managed by Barry Morrison, CEO of Aston Hill Institutional Partners, a division of Aston Hill Asset Management.
“We believe our approach to using alternative strategies combined with fundamental and quantitative analysis, provides a unique product that addresses the need for lower risk, less correlated portfolios,” says Cheng.