The Science of Making Money
Enora Global Fund’s approach is based on systematic trading with a laser focus on risk. Although our investment team’s experience and expertise play an important role in identifying opportunities and designing strategies,
we use automated systems to ensure that emotions and biases play no part in the trading process.
AIMS AND OBJECTIVES
INVESTMENT METHODOLOGY
TECHNOLOGY
AIMS AND OBJECTIVES
Aims
The impetus of our aims is the belief that we are doing what hedge funds should be doing – generating risk-controlled and uncorrelated returns to traditional asset classes. When investors choose to invest in Mutual funds, they diversify through geography, sector and manager selection but ultimately seek to gain directional exposure to an underlying asset - traditionally equities, bonds or real estate. Hedge funds were supposed to be different. Their raison d'etre was to provide uncorrelated returns to traditional asset classes.
Now, however, hedge funds have become increasingly correlated to the underlying asset classes they trade. Equity long/short strategies in the U.S. for instance, are correlated to U.S. equity markets, fixed-income hedge funds to interest rate directions and so on. This basic change in approach has resulted in an explosion in hedge fund categories not only by underlying asset class but also geography - fixed income Europe, fixed income ex-japan, equity long/short, Asia-focused, sector-based, event-driven etc. We believe that none of these categories should matter and hedge funds should deliver absolute and uncorrelated returns. The assets used to deliver those returns should be immaterial.
Our aim is not to provide exposure to a particular region or industry, but to generate consistent, absolute and uncorrelated returns. Since inception, that’s exactly what we’ve done.
Objective
To generate a consistent, net-of-fees annual Return of ~ 20% with a low drawdown and without correlations to traditional asset classes.
INVESTMENT METHODOLOGY
To achieve our objectives, we apply data science techniques including optimisation and artificial intelligence (AI) to predict short-term price movements in scores of different trading instruments.
Methodology Elements
Our pattern recognition algorithms are designed to identify and exploit inefficiencies in the world’s financial markets. We trade in any highly liquid instruments across asset classes that allow us to bring our expertise, experience and technology to bear.
These instruments include listed equities and exchange-traded equity derivatives, including futures contracts, swaps and forwards. We also invest in currencies, currency derivatives, rated and unrated bonds and government securities.
We take both long and short positions in these instruments. This allows us to be agnostic as to the direction of the underlying asset. The sole constraint on our investment universe is the availability of reasonable liquidity in the instruments in which we trade.
The limits on our fund's gross exposure are set to ensure that we always remain within our risk tolerance. We never borrow to provide broker margins. Instead, we increase gross exposure through the inherent leverage built into exchange traded futures and options.
Control & Minimize
Our obsession with controlling risk means that we employ a number of hedging techniques to shape the risk-adjusted return of our fund.
Refine & Enhance
Our process is never static. We constantly refine, update and enhance our algorithms drawing on our extensive and specialized quantitative capabilities and proprietary technologies.
TECHNOLOGY