Picton Mahoney adds long-short equity ETF to liquid alternatives suite

Jul 20th, 2020 | By | Category: Alternatives / Multi-Asset

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Toronto-based Picton Mahoney Asset Management has launched a new actively managed ETF that follows a long-short global equity strategy.

David Picton, President & Portfolio Manager at Picton Mahoney.

David Picton, President and CEO at Picton Mahoney.

The Picton Mahoney Fortified Long Short Alternative Fund (PFLS CN) has listed on the Toronto Stock Exchange and comes with a management fee of 0.95%.

The launch comes one year after Picton Mahoney unveiled its liquid alternatives ETF suite with the launch of four actively managed funds providing hedge-fund-style returns.

Alternative investments can offer diversification benefits when added to conventional stock/bond portfolios, helping to improve risk-adjusted returns.

Liquid alternatives – alternative investment strategies made available to the retail market – come with many benefits including easier entry point in terms of initial investment, regulated transparency and reporting requirements, and limits on the amount of total leverage used.

While liquid alternative ETFs are typically more expensive than their equity and fixed income counterparts, their management fees are generally lower than those charged through traditional alternative investment vehicles.

All ETFs in Picton Mahoney’s liquid alternatives suite incorporate the firm’s proprietary Fortified Investing approach – a rules-based process focused on managing risk by mitigating downside exposure while seeking to build long-term growth, regardless of market conditions.

The new fund pursues this objective by following a 150/100 long-short strategy consisting of a 150% long allocation to companies that Picton Mahoney believes are in the midst of fundamental positive change with reasonable valuations, combined with a 100% short allocation to companies believed to be overvalued or susceptible to negative fundamentals.

The ETF will focus on North American equities but does have the flexibility to venture further abroad in pursuit of opportunities.

The fund provides less equity market exposure, lower volatility, and mitigated downside risk relative to long-only portfolios.

David Picton, President and CEO at Picton Mahoney, commented, “We are pleased to announce the launch of our new Picton Mahoney Fortified Long Short Alternative Fund at a pivotal moment for many Canadian investors seeking to manage volatility and mitigate downside risk. Our new alternative fund offering now allows a much broader segment of Canadian investors to benefit from our proven experience and results.

“In the current unpredictable environment, investors are understandably concerned about equity market volatility. Our new fund aims to offer a more comfortable investment experience, helping Canadians stay invested and on track in meeting their financial goals with greater certainty.”

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