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Othania’s 2-Year-Old Tiger Cub

Report: Systematic Strategies

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Stockholm (HedgeNordic) – Most young funds’ early journeys are chock-full of firsts and each milestone is marked by a moment of pride and celebration. Investin Othania Etisk Formuevækst, one of the two vehicles of Danish asset manager Othania, has just reached two years of operations, long surpassing DKK 200 million in assets under management after starting with only DKK 2 million.

“The first two years for Investin Othania Etisk Formuevækst have already passed,” with the fund currently having about DKK 230 million under management. Launched in late October of 2018, Investin Othania Etisk Formuevækst gained 1.3 percent in the rough fourth quarter of that year, then advanced an additional 17.6 percent in 2019. The fund is now down 2.1 percent year-to-date through the end of Friday last week after gaining approximately six percent last week alone.

“The 24 months have been characterized by large fluctuations on both the positive and negative side, so risk management is a key factor to achieve good absolute and risk-adjusted returns,” says Vincent Larsen, who co-founded Othania in March 2016 with his younger brother Christian. “Therefore, we are pleased that we have delivered good returns for our customers and protected the investments through the great uncertainties that have been throughout the period, including the Covid-19 crisis,” he continues. “We are proud of this and look forward to continuing our work to deliver good returns and capital preservation.”

Both Othania funds – Investin Othania Etisk Formuevækst and the older Othania Invest – use a systematic model to allocate capital either into equity or bond exchange-traded funds (ETFs) depending on the degree of risk in equity markets for the month ahead. As previously explained by Vincent Larsen, the investment model called Tiger decides on an all-in or all-out rotation of equities by “estimating whether risk levels in the stock market are rising or not for the coming month using leading indicators on economic activity, interest rates, and stock market movements.”

While Othania Invest focuses on U.S. equity and bond ETFs, the younger Investin Othania Etisk Formuevækst focuses on global ETFs that consider environmental, social and governance (ESG) attributes. These ETFs generally exclude companies producing adult entertainment, alcohol and tobacco products, controversial weapons including civilian firearms, as well as fossil fuels, gambling activities, among others. Launched in April of 2016, Othania Invest has delivered an annualized return of 7.1 percent since inception through the end of October. The fund is now up 5.3 percent year-to-date through the end of Friday last week following a six percent-advance over the past week.

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Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

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