"Many other hedge fund strategies have produced higher returns in the past, but they tended to have higher correlation with various markets. With low risk, the market-neutral strategy is expected to produce relatively stable returns," said an official at NFR&T.
The performance of the underlying funds is evaluated on a monthly basis, with the possibility of allocations being made into other funds independently researched by NFR&T, the official said.
While the move marks the firm's first Japan-focused fund-of-funds offering, Nomura has previously distributed two global fund-of-hedge-funds products to retail investors. In October last year, the firm launched the Nomura Multi-Strategy Fund, which invests in equity market-neutral, equity long/short, convertible bond arbitrage, bond arbitrage, merger and credit hedge strategies. In February, it began distributing the Goldman Sachs Global Currency Fund, which invests in foreign currency.