Florida based INTECH Investment Management, a subsidiary of Janus Capital, has launched two global absolute volatility funds to include strategies benchmarked to the MSCI All Country World Index (ACWI).
This expansion reflects increasing institutional-investor demand for a variety of products that offer the potential to generate alpha, while meeting their need for reduced volatility.
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The new offerings are designed for institutional investors seeking to further diversify their non-U.S. asset allocations, and provide the potential for capital appreciation with less absolute risk than the capitalization-weighted index. The new strategies follow INTECH’s expansion into the emerging markets equity space earlier this year.
All of INTECH’s managed- and low-volatility strategies, as well as its relative-return strategies, are based on the same volatility-capture process that INTECH has been using to construct portfolios for more than 25 years.
INTECH’s global all country managed volatility strategy has an excess return target of 3-to-4% above the benchmark, with a risk target of approximately 30% less than the benchmark, on average.
The global all country low volatility strategy has a modest above-market return target, with a risk target of approximately 45% less than the MSCI All Country World Index, on average.
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By GlobalDataAlso benchmarked to the MSCI ACWI Index are INTECH’s three new relative-volatility strategies: global all country core, global all country core select and global all country enhanced index.
Adrian Banner, chief executive and chief investment officer of INTECH, said: "INTECH manages portfolios using stock-price volatility and the correlation between stocks in an attempt to generate a long-term excess return above the cap-weighted benchmark. Our relative-return strategies, first launched in 1987, target low tracking error, while our absolute volatility portfolios, introduced in 2011, seek to minimize standard deviation rather than tracking error.
We continue to research further applications of our mathematically-based investment process, with the goal of providing additional investment solutions that will help our clients meet their long-term funding goals," Banner added.
John F Brown, senior vice president and head of global client development at INTECH said: "Institutional investors are increasingly interested in risk-managed investment strategies that offer the potential to generate alpha. This is precisely what we have been offering at INTECH for almost 26 years.
However, while clients’ aversion for risk continues to grow, so does their need for alpha; hence their interest in non-U.S. strategies that offer the potential for higher returns. At INTECH, we believe our strategies offer institutional investors the alpha potential they are seeking – all within a risk-managed framework," Brown added.
