In October 2015, Ocean Dial Asset Management launched a second, daily dealing, sub-fund under its UCITS umbrella, Ocean Dial Systematic India Return Fund. The Fund is an Open Ended Investment Company (OEIC).
The objective of the Fund is to generate long-term capital appreciation, with lower volatility and lesser drawdown than the market, by investing primarily, either directly or through the use of derivatives, in a diversified portfolio of equities and equity-related securities which are listed, traded or dealt in India. Stock selection will involve a quantitative process constructed internally with the support of Ocean Dial Asset Management India Private Limited. Currency and market exposure is managed dynamically; equity exposure can be hedged through index futures and both the long portfolio construction and beta management are rules based and non-discretionary. The Fund began trading in November 2015 with capital of USD 3 million.
The Fund will seek to identify and take advantage of movements in underlying equity securities by trading long equity positions, either directly or through the use of derivatives. The Fund may also create synthetic short positions to hedge the Fund’s portfolio against a fall in the value of the assets held in the portfolio and occasionally to gain a return from an expected fall in the market. The use of synthetic short positions may vary and will depend on market conditions. Short positions will only be taken synthetically through the use of futures on the CNX Defty Index (Benchmark), the Nifty Index or other 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.