Ossiam goes global with minimum variance ETFs
Ossiam, a Paris-based smart beta exchange traded fund manager, has launched a minimum variance ETF investing in global developed equity markets.
The new fund, Ossiam ETF World Minimum Variance, replicates the performance of the Ossiam World Minimum Variance index. The aim of the index is to deliver the net total return performance of a selection of the most liquid stocks from the S&P Global 1200 index, weighted to minimize the risk of the total portfolio.
The fund will be listed on the New York Stock Exchange, Euronext in Paris, Borsa Italiana in Milan, Deutsche Börse in Frankfurt and the London Stock Exchange (the latter as of October 29).
Ossiam is an affiliate of Natixis Global Asset Management (NGAM), which will be the distributor of the new fund in the UK, where it will be listed in both Sterling and US dollars. It has a total expense ratio of 0.65% per annum.
Bruno Poulin, CEO of Ossiam, said the firm wanted to “make available to investors a means of investing in a global equities portfolio that aims to reduce volatility.”
He added the “Minimum Variance ETFs offer access to diversified portfolios – exposed to equity markets, with on average a 30% reduction in volatility and drawdowns in a systematic framework.”
The product has proven popular. Ossiam has enjoyed inflows from institutional, wholesale and retail investors into its ETF products since launch in June 2011. Its assets under management now stand at €525.5m.
Hervé Guinamant, President and CEO of NGAM international distribution, said: “Volatility is here to stay and so are strategies to address it. Our recent global survey demonstrated that the vast majority of institutional investors are finding it difficult to mitigate the impact of market volatility on portfolios.
“But an even greater proportion view market volatility as an investment opportunity. Ossiam’s strategies and funds are designed to both stand up to today’s volatile markets and help investors reach their return objectives.”
Ossiam has already achieved double digit performance in existing ETF minimum variance strategies since launch in June 2011. The Ossiam ETF US Minimum Variance fund has made 18.43% since inception, followed by the Ossiam ETF iSTOXX Europe Minimum Variance, which is up 12.36%, both substantially beating their respective benchmarks.