BLACKROCK’s Mark Lyttleton should be on a high. His UK Absolute Alpha fund is up 7.5% over the past 12 months — no mean feat against a market that has plunged 15%.

However, the 37-year-old, who joined Black Rock as a graduate trainee almost 16 years ago having studied chemistry at the University of York, is far from complacent.

That’s good news for scores of investors who have piled into the fund, which promises to do well in falling as well as rising markets by its ability to “short” a security — a bet that makes money when the price of that security drops.

The fund is around 10 times the size it was last summer at £1.3 billion. It is largely responsible for the absolute-return sector being the most popular in June; then, a net £214m flowed into the sector, taking the total to above £2 billion.

So, how has Lyttleton done it? And can he continue to deliver? We speak to him.

You have beaten the credit crunch. Why do you think you have done so well?

ML: The main thing is that the fund has a very different brief from lots of other funds out there.

We have the investment powers to make money in rising and falling markets, and when we launched the fund in 2005 we always hoped there would be a time when it would come into its own.

It’s not a fund for rampant bull markets; it’s a fund for a through-the-market cycle for people who want a much steadier investment performance, rather than highs and lows.

The fund uses both traditional (commonly known as “long”) and “synthetic-short” investments in UK equities. A “short” is created by selling a stock which the fund does not physically own, with the intention of purchasing it subsequently at a lower price to secure a profit.

Our short positions are mainly achieved by investing in contracts for difference, which are a form of cash-settled derivative. CFDs are often an efficient way of securing exposure to UK stocks as they do not attract stamp duty.

So, which stocks have helped your performance — on both the short and the long side?

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