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Amundi launches dividend absolute return fund
08 October 2013
First absolute return fund to invest in global dividends
Amundi has announced the launch of its Amundi Funds Absolute Global Dividend fund, the first absolute return fund to invest in global dividends.
The fund, which is managed by Amundi’s subsidiary BFT Gestion, aims to generate an annual gross yield of 7% over a minimum investment horizon of three years.
It looks to exploit potential discounts in undervalued dividends by analysing the discrepancies between expected future dividends, as priced in by the market, and actual dividend payments, with greater undervaluation leading to potential gains.
Warin Buntrock, fund manager at BFT Gestion, said: “The implied dividend market has grown rapidly since 2008. Despite its spectacular recent performance, it continues to offer attractive opportunities and offers a risk/reward profile that is de-correlated with other strategies.
"Since the fund’s inception on 15 April 2013, for example, futures on Nikkei 2016 dividends have gained 15.5% while the Nikkei index has risen by only 0.85%.
“Implied dividends for the FTSE and Euro Stoxx 50 currently offer the greatest upside potential and Amundi Funds Absolute Global Dividend seeks to tap such opportunities.”
The fund invests in both dividend futures and swaps on the dividends of stock market indices in global equity markets, allowing it to take positions based on the anticipated level of dividends.
The fund seeks to generate an absolute return based on a macro and micro-economic analysis of future profits and dividend cycles; directional strategies; and diversification through investing in major global markets and relative value strategies.