BlackRock is planning to launch an equity absolute return fund focusing on Latin America, the USand Canada reported City Wire.

The Americas Diversified Equity Absolute Return fund, set to launch in the first quarter, will be run by BlackRock’s scientific active equity (SAE) team.  Managers will seek to achieve a positive absolute return regardless of market movements and have at least 70% invested in equities and equity-related securities.

Alex Hoctor-Duncan, BlackRock’s head of retail sales, EMEA, said: “Designed for investors seeking consistent absolute returns from a portfolio of long and synthetic short equity exposures in the Americas, the fund will offer reduced volatility and a lower correlation to other asset classes than that of traditional long-only equity funds.”

The SAE team uses its research programme to identify potential market inefficiencies, highlight those which can be exploited and gather evidence to validate their ability to predict active returns.

The fund, which will be domiciled in Luxembourg, will have an annual management fee of up to 1.5%, a performance fee of 20% over the hurdle rate with a high watermark and use three-month USD Libor as its benchmark.