Monsoon Launches Systematic Asia Pacific Fund

Jul 20 2011 | 1:40pm ET

Bethesda, Md.-based Monsoon Capital has launched a new pan-Asia equity futures CTA strategy, the Monsoon Asia-Pacific Systematic Program.

The fund went live on July 1. A Dublin-domiciled UCITS version of the strategy will launch in September 2011. The two funds currently run a combined $12 million in proprietary capital.

Monsoon founder and CEO Gautam Prakash told FINalternatives the $400 million asset manager has run the strategy for the past eight months in a proprietary trading account.

“Eight months is not a long period to draw any big conclusions,” he said, “but it’s enough to feel confident launching as a fund.”

Prakash says the strategy has delivered attractive returns (17.97% YTD, according to BarclayHedge data) with low correlations and drawdowns. The fund trades index futures across the eight most liquid equity index futures markets in the region (Taiwan, China, Hong Kong, Korea, India, Japan, Australia and Singapore) using a mix of pattern recognition, trend-following and mean-reversion systems. 

Prakash says Monsoon’s systematic approach is unique in Asia, where most funds are fundamental long-short, but he believes it offers the best way to take advantage of the high volatility, strong trends and price inefficiencies that characterize Asia-Pacific markets.

The Asia Pacific fund grew out of Monsoon’s preparations for the launch of its fully systematic India Opportunity Fund. “We discovered that some systems worked quite well across Asia,” says Prakash.

Fees are 1.5% and 20% and minimum investment is $1 million. Prakash says their target investors are CTA funds of funds and broader funds of funds, high net worth individuals and mid-sized family offices.

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