Volatility Controlled Equity Fund launched
Schroders launches first Volatility Controlled Equity Fund with downside protection
16 November 2015
Schroders Multi-asset Investments and Portfolio Solutions (MAPS) is today announcing the launch of the UK’s first volatility controlled equity fund with downside protection, designed specifically for UK institutional investors. The Schroder Volatility Controlled Equity Fund has been structured to offer investors equity exposure with downside protection, enabling clients to keep on track with their long-term goals.
The fund aims to give Schroders’ clients and investors exposure to global equities while maintaining a protected approach to volatility. This is achieved through exposure to a volatility targeted global equity index[i], with downside protection gained through a rolling program of monthly put options.
Initial funding has been received from a UK final salary pension scheme under the advice of their investment consultant Redington. The Schroder Volatility Controlled Equity Fund will be managed by the Multi-asset Investments and Portfolio Solutions (MAPS) team[ii].
Andy Connell, Head of Portfolio Solutions, Schroders commented:
“We have seen a lot of interest from clients wishing to invest in the Schroder Volatility Controlled Equity Fund and we welcome the increasing recognition of the techniques we are using. The recent market volatility further supports the importance of having the control capabilities in the fund to manage the downside risks.”
Dan Mikulskis, Managing Director & Co-head of Asset Liability Modelling (ALM), Redington commented:
“Achieving clients’ investment objectives drives our investment strategy work and recommendations. We believe risk control and downside protection are two powerful tools for keeping clients’ portfolios on track for those long-term goals. We wanted a cost effective equity pooled fund that was easy to access and had these characteristics.”
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Schroders is a global asset management company with £294.8 billion (EUR 400.0 billion/$446.5 billion) under management as at 30 September 2015. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors. With one of the largest networks of offices of any dedicated asset management company, we operate from 37 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
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[i] MSCI Total Return Developed World Index with 10% volatility target overlay
[ii] The team consists of over 120 investment professionals worldwide who currently manage over £75 billion in assets across a number of global strategies as at 30 September 2015.