Key Takeaways
- • Aspect Capital launches Alternative Markets Fund (AAMF) with $1 billion initial capacity, expanding its trend-following strategy across 160 markets including emerging market currencies, interest rate swaps, TIPS, credit indices, and niche commodities.
- • The fund addresses a critical investor need for diversification in an environment where equity and bond returns are expected to moderate from the historically high levels of the past decade, with higher post-crisis correlations between traditional assets forcing managers to seek new return sources.
- • Trend-following strategies in alternative markets exhibit low and asymmetric correlations to traditional long-only assets, preserving "crisis alpha" while providing an additional diversification layer with only 0.6 moderate correlation to momentum strategies in traditional liquid futures markets.
- • Aspect's $7 billion asset base has grown through inflows and performance, with over half of AAMF's 160 markets already traded in other Aspect strategies (Aspect Diversified and Aspect Systematic Global Macro), while introducing less accessible markets such as South African maize futures and Italian electricity contracts.
- • The strategy applies Aspect's enhanced trend capture models to OTC asset classes and international markets, capturing medium-term trends over two to three months or longer in deep liquid markets, with demonstrated success recognized through multiple industry awards.
Summary
Aspect Capital, a London-based systematic investment manager with $7 billion in assets under management, has launched its Alternative Markets Fund (AAMF) with an initial capacity of $1 billion. The fund represents the firm's response to mounting investor demand for diversification in a market environment where historical return expectations from equities and bonds are unlikely to repeat. According to Aspect Capital CEO Anthony Todd, the imperative to diversify has become increasingly urgent among institutional investors concerned about elevated correlations between and within traditional asset classes following the post-crisis period.
The AAMF applies Aspect's enhanced trend-following models to a portfolio of 160 markets, substantially expanding the universe of tradable securities beyond traditional liquid futures. The fund encompasses both markets already integrated into other Aspect strategies—including emerging market currencies, non-deliverable forwards (NDFs), and interest rate swaps traded in the 20-year-old flagship Aspect Diversified and the recently launched Aspect Systematic Global Macro—and entirely new market exposures. Novel additions include Treasury Inflation-Protected Securities (TIPS), credit indices, and specialized commodity contracts such as South African maize and Italian electricity futures, alongside equity sector indices. Over half of the 160 markets in AAMF are already traded across other Aspect programs, while the remainder introduces alternative exposures not available in the firm's existing strategies.
A key advantage of trend-following in alternative markets is the preservation of crisis alpha characteristics inherent to CTA strategies: low and asymmetric correlations to traditional long-only assets. Additionally, momentum strategies applied to alternative markets exhibit only moderate correlation of approximately 0.6 to equivalent strategies in traditional liquid futures markets, creating an additional diversification layer. This structural feature addresses the core challenge facing institutional allocators—post-crisis increases in correlations within and between asset classes have forced managers to deepen their research into new diversification sources. The $1 billion initial capacity allocated to AAMF is independent of any sub-allocations from other Aspect strategies, preserving dedicated capacity for this alternative markets mandate.
Aspect's track record supports the expansion: the firm won Best Performing Fund recognition in 2021 for the Alternative Markets Trend Follower category (covering both Financials and Commodities) and has been honored as Quant Hedge Fund Manager of the Year at multiple industry awards. The firm's client base includes central banks, government agencies, pension funds, and insurance companies, reflecting the institutional focus of its investment approach. The AAMF launch reflects Aspect's long-standing commitment to systematic trend-following across increasingly diverse market structures, targeting medium-term trends over periods of two to three months or longer in deep liquid markets.
The AAMF applies Aspect's enhanced trend-following models to a portfolio of 160 markets, substantially expanding the universe of tradable securities beyond traditional liquid futures. The fund encompasses both markets already integrated into other Aspect strategies—including emerging market currencies, non-deliverable forwards (NDFs), and interest rate swaps traded in the 20-year-old flagship Aspect Diversified and the recently launched Aspect Systematic Global Macro—and entirely new market exposures. Novel additions include Treasury Inflation-Protected Securities (TIPS), credit indices, and specialized commodity contracts such as South African maize and Italian electricity futures, alongside equity sector indices. Over half of the 160 markets in AAMF are already traded across other Aspect programs, while the remainder introduces alternative exposures not available in the firm's existing strategies.
A key advantage of trend-following in alternative markets is the preservation of crisis alpha characteristics inherent to CTA strategies: low and asymmetric correlations to traditional long-only assets. Additionally, momentum strategies applied to alternative markets exhibit only moderate correlation of approximately 0.6 to equivalent strategies in traditional liquid futures markets, creating an additional diversification layer. This structural feature addresses the core challenge facing institutional allocators—post-crisis increases in correlations within and between asset classes have forced managers to deepen their research into new diversification sources. The $1 billion initial capacity allocated to AAMF is independent of any sub-allocations from other Aspect strategies, preserving dedicated capacity for this alternative markets mandate.
Aspect's track record supports the expansion: the firm won Best Performing Fund recognition in 2021 for the Alternative Markets Trend Follower category (covering both Financials and Commodities) and has been honored as Quant Hedge Fund Manager of the Year at multiple industry awards. The firm's client base includes central banks, government agencies, pension funds, and insurance companies, reflecting the institutional focus of its investment approach. The AAMF launch reflects Aspect's long-standing commitment to systematic trend-following across increasingly diverse market structures, targeting medium-term trends over periods of two to three months or longer in deep liquid markets.
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