Global index provider FTSE Group has launched the FTSE Global Minimum Variance Index Series, which it said aims to deliver reduced index volatility and thereby offer potential improvements to the risk reward trade-off.
The new index series is based on the widely adopted FTSE All-World Developed Index Series, and provides investors with an alternative to traditional cap weighted approaches, while maintaining full allocation to the relevant equity market. The global series follows on from the launch of the FTSE 100 Minimum Variance Index Series.
FTSE added that investors looking for a broad, diversified and investable portfolio incorporating a low volatility/variance objective may wish to use the new series to support these objectives. Volatility reduction is achieved using an intuitive, transparent rules-based approach that minimises historical variance and results in a broad index which is diversified across country, industry and stock levels.
Key features of the new global product are that it:
- Targets a more efficient investment portfolio through reduced volatility.
- Diversified index outcomes.
- Transparent approach with minimal constraints.
- Expected returns play no role.
- Academic evidence of a low volatility effect.
“In the current economic environment and given the nature of equity market returns in recent years, investors are increasingly interested in lower volatility investments which concentrate on improving their risk return profile, while maintaining their allocation to global equity markets,” said Peter Gunthorp, managing director of research and analytics at FTSE.
Data from S&P Global Market Intelligence suggest that the German lender is struggling to meet capital and earnings figures.
However, a London summit on the industry’s introduction of the technology cautions that testing and acceptance are still at an early stage and firms should proceed with caution.
The Danish shipping and oil conglomerate confirmed that it will separate its businesses into stand-alone transport and energy divisions.
The central bank has tweaked its stimulus programme and is making a fresh effort to push Japan’s inflation rate above its 2% target.