Intech launches volatility-controlled Eurozone equities fund

Intech Investment Management has launched a low volatility strategy focused on the Eurozone for institutional investors looking for equities exposure with less volatility than market-cap weighted indices typically provide.

The product from the $39bn house comes at a time a range of investment managers launch funds or raise new monies for existing ones that try to generate returns while controlling risk, sometimes labeling them ‘minimum variance’.

Unigestion is one of Europe’s market leaders in this field in Switzerland, but groups such as Lazard also have minimum variance offerings.

Intech’s fund aims to beat the MSCI European Economic and Monetary Union index, gross of fees, with less volatility and a higher Sharpe ratio.

David Schofield, president of Intech’s international division, said the fund uses stock-price volatility and correlation between stocks.

CIO Adrian Banner said: “The optimisation process of Intech’s absolute volatility strategies attempts to minimise a portfolio’s standard deviation rather than its tracking error. These strategies represent a natural evolution of Intech’s mathematical investment process.”

The independently managed subsidiary of US investment giant Janus Capital Group also said today it had won finance from clients for its US low volatility strategy, after launching it October 2011. This strategy tries to beat the Russell 1000 index, gross of fees, with significantly lower absolute risk and a high Sharpe ratio.


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