Amundi launches minimum variance fund
Amundi has added a new fund to its minimum variance strategy with the launch of Amundi Funds Equity Global Minimum Variance, a sub-fund of the Luxembourg Sicav Amundi Funds.
The fund is Ucits IV compliant, and part of its “NextGen” Strategies range. It seeks to outperform the MSCI World index, over a five-year investment horizon, and aims to have less volatility than that of the index. The fund will invest at least two thirds of its assets in global equities represented within the MSCI World index,
The fund is aimed at clients looking to limit the overall absolute, rather than relative risk in their equity portfolio. Amundi said: “Against a backdrop of an uncertain outlook and challenging market environment in international markets, investors’ needs are changing.”
Risk management and portfolio construction have now become the key concerns for investors, alongside long-term performance. Amundi’s NextGen strategies are designed to “smoothen the ride to provide an improved return potential with lower risk,” Amundi said.
Melchior Dechelette, fund manager of Amundi Funds Equity Global Minimum Variance, said: “Amundi’s Minimum Variance management technique now has a successful three-year track record within a European equity universe. Using the same investment approach, this new fund offers investors a highly diversified exposure to global equity markets with the aim of capturing the potential upside while controlling risk. ”
Amundi uses an in-house stock screening process that picks out companies with the most solid fundamental profiles. Using quantitative optimization tools, each stock is weighted according to volatility and correlation criteria in order to minimise the variance (volatility) of the portfolio.
The stocks are actively monitored for risk. The team singles out possible risk concentration and reduces exposure to factors (sectors, countries, styles) that are deemed too risky, with the aim of avoiding excessive exposure to crowded trades whose unwinding may be detrimental to portfolio performance.
Amundi’s NextGen range comprises five equity strategies enabling investors to take a different approach to equity investment, with risk management taking centre stage. Drawing together several areas of expertise, Amundi proposes an alternative to traditional stock-picking involving advanced risk monitoring and in-depth equity research and analysis.
Assets under management for Next Gen Strategies reached €1.2bn at end August 2012.