In March 2018, Ocean Dial Asset Management India launched its first, monthly dealing, SEBI registered Open Ended Category III AIF, Ocean Dial Systematic Equity Fund.
The Fund aims is to generate capital appreciation over a market cycle, with lower volatility and lesser drawdown than the market. The Fund primarily invests in largest 50 free-float market capitalization stocks, their derivatives and tactically manages market exposure using derivatives or synthetic derivatives of NIFTY 50 Index or other financial indices which are highly correlated to the Benchmark Index. The Fund selects stocks as well as manages equity exposure in accordance with pre-defined rules to remove behavioral biases in investing.
The Fund will seek to identify and take advantage of movements in underlying equity securities by trading long equity positions, either directly or using derivatives. The Fund builds long equity portfolio using time-tested principles of value, momentum and mean-reversion.
In times of market downtrend and macro distress, the Fund may also create synthetic short positions to manage the Fund’s equity exposure to protect it against a fall in the value of the assets held and occasionally to gain from market corrections. The Fund builds short positions using Nifty Index Futures and derivatives of high beta stocks constituting financial indices which are highly correlated to the Benchmark Index. While the Fund will generally be long biased, it may take both long and short positions simultaneously and from time to time may be net short equities in aggregate. It is expected that net synthetic short equity positions will not exceed 50% of the Fund’s net assets.
