- Advertisement -
- Advertisement -

Othania’s Equity Fund Thrives on Quality and Momentum Factors

Report: Systematic Strategies

- Advertisement -

Stockholm (HedgeNordic) – Around two years ago, Danish boutique fund manager Othania launched a pure equity fund that dynamically shifts exposure between “offensive” and “defensive” equity exchange-traded funds (ETFs) based on market conditions. In what has been a strong year for equities so far, Othania Globale Aktier has outperformed the global stock market benchmark by over-weighting factors such as quality and momentum. The fund achieved a year-to-date gain of 21.1 percent through June 25, compared to approximately 15.3 percent for the MSCI World.

“The year’s excess return was primarily driven by our overweight in quality and momentum factors,” explains Vincent Dilling-Larsen, CIO and co-founder of Othania. “This emphasis reflects an overweight position in technology companies, which has made a significant contribution to the year’s excess return,” he elaborates. The 21 percent advance so far in 2024 has brought Othania Globale Aktier’s cumulative return since its mid-2022 launch to 7.5 percent, recovering from a 7.5 percent decline in 2022 and a loss of 4.1 percent in 2023.

“The year’s excess return was primarily driven by our overweight in quality and momentum factors. We are pleased with the good start to the year…”

Vincent Dilling-Larsen, CIO and co-founder of Othania.

Similar to other funds managed by Othania, Othania Globale Aktier relies on a proprietary “Tiger” investment model that evaluates equity market risk on a monthly basis. This model uses leading indicators such as economic activity, interest rates, and stock market movements to shift allocations from “offensive” ETFs to more “defensive” equity ETFs during periods of heightened market risk. When the TIGER model signals optimism in equities, Othania Globale Aktier invests entirely in a portfolio of global equity ETFs emphasizing risk-on factors such as momentum, quality, and sustainability, among others. Conversely, during negative market conditions, the fund shifts entirely to a multi-factor global ETF equity portfolio comprising low volatility, minimum volatility, long volatility, and other defensive sectors.

“The positive sentiment in the financial markets has continued. Almost everywhere we look in the world, stock markets have risen in the past six weeks and year-to-date.”

Vincent Dilling-Larsen, CIO and co-founder of Othania.

“The positive sentiment in the financial markets has continued. Almost everywhere we look in the world, stock markets have risen in the past six weeks and year-to-date,” notes Dilling-Larsen, explaining the fund’s strategic emphasis on quality and momentum factors. “During this period, these gains have also been significantly more broadly distributed across various sectors and factors – which is clearly a positive sign,” he concludes.

“We are pleased with the good start to the year and believe that our broad risk diversification across many liquid asset classes will continue to create value for our co-investors in 2024.”

Vincent Dilling-Larsen, CIO and co-founder of Othania.

All three Othania funds utilizing the “Tiger” model have performed well this year. Othania Invest and Othania Allokering Verden gained 10.8 percent and 12.3 percent, respectively, in the first five months of this year. The asset manager’s other two vehicles, Othania Stabil Investering and Othania Balanceret Makro have also delivered strong returns. Othania Stabil Investering, Othania’s multi-asset fund investing equally in five different and uncorrelated asset classes via liquid exchange-traded products, gained 9.5 percent in the first five months of 2024. “We are pleased with the good start to the year and believe that our broad risk diversification across many liquid asset classes will continue to create value for our co-investors in 2024,” says Dilling-Larsen.

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

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

Latest Articles

Ridge Capital Expands Team After Hitting €100 Million Milestone

Stockholm (HedgeNordic) – With its unconventional high-yield bond strategy now exceeding €100 million in assets under management, Ridge Capital is expanding its portfolio management...

“7 Years, Niller, Then You Know a Thing or Two”

Stockholm (HedgeNordic) – There is a Danish saying that goes, “7 years, Niller, then you know a thing or two,” suggesting that seven years...

Brobacke Gains 7.6% in Early July, Predicts Continued Bull Market

Stockholm (HedgeNordic) – After a relatively flat first half of 2024, marked by noticeable month-over-month volatility, discretionary macro fund Brobacke Global Allokering advanced 7.6...

Kristofer Barrett Back to Managing Tech Fund

Stockholm (HedgeNordic) – Kristofer Barrett, the former portfolio manager of the multi-billion-dollar Swedbank Robur Technology fund, has returned to managing a technology-focused equity fund....

Tidan’s Resurgence Amid Markets Needing a Touch of Magic

Stockholm (HedgeNordic) – In late 2021, Michael Falken and his team at Tidan Capital launched a hedge fund employing a capital structure relative value...

The Value of Short Selling for Symmetry

Stockholm (HedgeNordic) – Stock-picking hedge fund Symmetry Invest has achieved a net-of-fees annualized return of 18 percent since its inception just over 11 years...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -