Optima Fund of Funds Trumpets Stability Over Out-Performance

The Optima fund of hedge funds is up 3.3 per cent net of fees in the year to date, a performance which is eleven times better than the S & P 500 in the same period says the firm. “Too many people misperceive hedge funds as ‘esoteric’ or ‘speculative’,” claims D. Dixon Boardman, founder of the New York-based Optima Group, which manages over $2 billion in hedge funds. “The funds we invest with are anything but that. The Optima Fund relies on the old fashioned type of hedge fund that uses fundamental stock analysis to pick the winners and the losers in diverse industry groups.” But what Optima gains in stability it loses in performance: the fund has grown 17.7 per cent compound over three years and 18.9 per cent over five years, which looks good against a compounded decline of 2.5 percent in the S&P 500 over the last three years, but less good against other hedge funds. “We are really proud of our out performance,” admits Boardman. “But what pleases us most is that this was achieved with much less volatility than the market.” He sees plenty of support for US stock prices on the downside due to ample liquidity, but resistance on the upside due to rich valuations and potentially higher interest rates. “Such an environment should favor stock pickers who can find the winners on the long side and the losers on the short side,” says Boardman.