Sberbank of Russia : Asset Management rolls out First Hedge Fund

June 1, 2020, Moscow - Sberbank Asset Management is marketing First Hedge Fund, the first discretionary management strategy letting Sberbank customers hedge the risks of stock depreciation. Designed for Sberbank First customers, it is only available to accredited investors.

Under the strategy, funds will be invested in securities of overseas companies with a market cap topping USD5 bln, if they pursue a highly competitive business model or operate across fast-growing sectors of the economy, by purchasing shares in an interval mutual fund (IMF). These businesses include telecommunications, e-commerce, healthcare, social networks, online games, developers of artificial intelligence, and entities complying with principles of responsible environmental, social, and corporate governance investing.

The strategy stands out as it hedges risks to limit portfolio losses using mathematical algorithms. You can join or exit the strategy only once every six months. The strategy is configured with a longer withdrawal of funds as compared to other standard strategies.

Evgeny Linchik, Head of Equity, Sberbank Asset Management,

'When building an investment portfolio for our customers, we often face a dilemma. There are companies with high business growth rates like Netflix, Amazon, or Tesla, which makes them an attractive investment. However, as a rule, such businesses have a weak fundamental component like low business margins or high debts. Thus, the risks of stock prices of such companies plummeting are very high. We've come up with an idea to create a strategy that relies on the dynamic growth of the company's capitalization, but at the same time minimizes the losses of customers in the event of a market decline.'

Maria Podenko, Head of Sberbank First's Branch Network,

'Investing in hedge funds is risky. Qualified investors will enjoy optimal returns in US dollars, while the risks will not exceed 5% a year. The main advantage for our customers is the use of the investment risk hedging mechanism delivering the maximum income per each percentage of the risk taken.'