Despite all the hype around 1X0/X0 strategies, most suppliers have been able to hold their cards relatively close to their chests.  That’s because most of the buyers of these funds are institutional.  In other words, the funds are prospectus-exempt in many countries.  In fact, depending on the size of the investment, 130/30 strategies are often sold in the form of separately managed accounts (similar to many other institutional mandates).

It’s often not until a retail version of a strategy hits the market that we get a more detailed, or at least more readable, picture of the investment approach and value proposition of these funds.  This is exactly what happened in Canada last week when mutual fund manager Brompton Group filed a preliminary prospectus for a new closed-end 130/30 mutual fund.  The fund is sub-advised by UBS and is apparently a knock-off of an institutional fund offered by UBS in the US (”The Equity Alpha Relationship Fund“).

The impending launch was initially hinted by the Canadian media earlier in July (”130/30 fund poised to hit retail market“).  But what’s probably most interesting is the fund’s July 27th prospectus (publicly available here via Canada’s answer to the SEC’s Edgar Online).

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