AXA IM launches WF Equity Volatility fund
AXA Investment Managers has launched AXA WF Equity Volatility to offer institutional investors cost efficient exposure to the implied volatility of major equity markets.
According to the firm, equity volatility tends to be inversely correlated from traditional asset classes such as equities and therefore offers the twin benefits of diversification and extreme risk mitigation.
UCITS regulated AXA WF Equity Volatility seeks to capture significant increases in equity volatility in the European and/or US equity markets while partially mitigating the cost of carry of this exposure.
The fund achieves this by building a long position in implied volatility of the S&P 500 index and/or the Euro Stoxx 50 index through derivatives. In order to mitigate the cost of carry of this long position, the Fund has the flexibility to opportunistically take short positions on the near term implied volatility through the use of indices futures.
“Volatility, if managed dynamically, is not a mere measure of risk, it is also an attractive source of diversification and performance, especially for investors exposed to riskier assets. The challenge, however, is how to provide the long term long volatility exposure in a cost efficient manner. The strategy is designed to offer timely protection and strong gains when equity markets move into crisis mode,” said Laurent Ramsamy, lead fund manager of the fund.