Fulcrum Thematic Equity Market Neutral Fund

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In Short

Since the early days of hedge fund investing, the industry has been neatly classified into several distinct trading styles, such as global macro, equity market neutral and event driven.

While this segregation has helped investors make sensible comparisons between peers and track the performance of each style, it has also masked the underlying richness and diversity in approach amongst managers. Within the equity market neutral sphere, where the defining characteristic is a permanently neutral equity market beta (as opposed to the long-biased nature of equity long short approaches), strategies are classified further as being either quantitative or discretionary. Discretionary strategies typically trade concentrated pairs of stocks within the same sector and region, often based on shorter-term earnings releases or event catalysts. In contrast, quantitative strategies have gravitated to a near-elimination of single stock risk, usually extracting returns from persistent factor exposures, such as value, momentum and quality. The Fulcrum Thematic Equity Market Neutral (TEMN) strategy is differentiated versus both styles, borrowing key traits from each; specifically, it is purely discretionary in style, with a medium to long-term investment horizon and minimal single stock risk.

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