Toronto-based Mackenzie Financial Corp. is launching an absolute return fund based on the Canadian Securities Administrator’s alternative framework proposal for conventional mutual funds, the investment management firm announced on Wednesday.
Mackenzie Multi-Strategy Absolute Return Fund will seek a positive total return over a market cycle, regardless of the ups and downs.
“Absolute return mutual funds challenge the conventional approach to investing, and Mackenzie is proud to be the first to bring this non-traditional solution to Canadian retail investors,” says Michael Schnitman, senior vice president of product at Mackenzie, in a statement.
“The new fund has the added benefits of being transparent, highly liquid and closely regulated under National Instrument 81-102,” he adds.
While traditional relative return mutual funds tend to move with the market, the firm says, alternatives like the absolute return fund offer the potential for lower volatility by using a multi-strategy approach.
The fund will diversify in alternative ways, increasing portfolio stability by adding a component to the portfolio that is not correlated with markets.
“As we’ve seen in the U.S., absolute return strategies have demonstrated strong growth to become an important part of diversified asset allocation, thanks to their mass appeal for investors seeking to limit volatility and anyone looking to complement their portfolio with an innovative strategy,” Schnitman says.