positive returns equivalent to or in excess of the equity pr

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dec-sev

Senior Member
Russian
Hallo again.

The Soft Commodity Fund’s objective is the preservation of investor capital while generating positive returns equivalent to or in excess of the equity premium over cash.

This is too hard for me :) I can’t understand what “over cash” relates to.
To make it simple:
…positive returns equivalent to the equity premium.
Or the volume of the returns will exceed the volume of equity premium over cash.
Correct or not?
 
  • Old Novice

    Senior Member
    USA, English
    I don't know what "over cash" refers to, either, but the "equity premium" is often defined as the excess of the expected rate of return on common stocks over the return on government interest rates. So perhaps "over cash" means "over the short-term government interest rate", which is the safest return you can get on a cash deposit.

    However, it is impossible to preserve investor capital reliably while earning returns at least equal to the equity premium over short-term government rates, so either this is an incorrect interpretation or these people are stating goals that they cannot (legally) deliver with any certainty.
     

    rgibergues

    Member
    English
    Hi Dec-sev -
    In that context, 'over cash' relates to the index that the fund aims to track. It must have a benchmark documented elsewhere. In view of that, your first phrase : positive returns equivalent to the equity premium is the more accurate.

    The phrase you quote doesn't refer to volume.
     

    dec-sev

    Senior Member
    Russian
    Thanks for your responses.
    In that context, 'over cash' relates to the index that the fund aims to track. It must have a benchmark documented elsewhere.
    But there is no reference in this document to a benchmark document there "over cash" is supposed to be indicated. If I only understand what you say correctly.
     
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