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New Era for Arden xFund

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Stockholm (HedgeNordic) – Just over after successfully running his time-tested systematic trend-following approach with Epoque, Martin Redgård has assumed management of another fund, Arden xFund. Having secured seed funding for the fund, Redgård will apply this market-neutral trend-following approach to Nordic single stocks.

In early 2023, Martin Redgård, formerly CIO at US-based CTA manager Taaffeite Capital Management, took charge of Tenoris One – later rebranded as Epoque – to implement his short-term systematic trend-following approach across G20 currencies and major stock market indices. After gaining 2.3 percent in 2023 – a challenging year for most trend-followers, Epoque booked a 6.2 percent increase in the first two months of 2024. Now, with Arden xFund, he has taken the helm of a second fund under the umbrella of AIFM Group. “It’s essentially the same takeover process as with the previous fund,” explains Redgård.

“The fund will employ trend-following on large-cap Nordic individual stocks, an approach that has been a small part of Epoque since the beginning of the year.”

Starting later this March, Arden xFund will implement a short-term trend-following approach on a majority of single stocks in the large-cap Nordic index, covering about 150 companies. “The fund will employ trend-following on large-cap Nordic individual stocks, an approach that has been a small part of Epoque since the beginning of the year,” explains Redgård. “These individual stocks are typically uncorrelated on a relatively short-term basis,” he notes. Some of them may follow broader market trends more closely and behave more like a beta vehicle. “But many of them have their own path, which makes this universe very attractive if you view it through the lens of a trend-follower.”

“These individual stocks are typically uncorrelated on a relatively short-term basis…many of them have their own path, which makes this universe very attractive if you view it through the lens of a trend-follower.”

Redgård will primarily utilize futures and forwards listed on Nasdaq OMX to implement his trend-following approach within single stocks. Arden xFund will also adopt the same risk management approach as Epoque, which relies on predetermined stop losses for each position and volatility-weighted risk allocation. “All positions are scaled based on their volatility at entry. I look at the individual volatility of each security and scale the size accordingly to ensure that the fund assumes the same risk on the downside on every trade,” explains Redgård. “And if I’m wrong, there’s a hard stop in place to get out of the position.”

With Redgård aiming to capture price momentum on a weekly timeframe – with positions ranging from days to months, Arden xFund will have exposure to two-thirds of the universe on either the long or short side at any given time. The limited correlation between individual stocks will aid Arden xFund’s objective of generating returns irrespective of market conditions. The approach used in Arden xFund aims to maintain a market-neutral portfolio with a target beta of zero. “Over time, the correlation to the index and the broader market is intended to be close to zero.”

“Managing the two funds at the same time is quite straightforward with good systems and strategies in place.”

Redgård sees no challenges in running both vehicles simultaneously due to his systematic approach. “Everything I do on my side is about constructing systems,” says Redgård. He establishes positions in advance and only executes trades at the market open. “Managing the two funds at the same time is quite straightforward with good systems and strategies in place,” he concludes.

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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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