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Natixis Global Asset Management launches ASG Tactical US Market Fund


Natixis Global Asset Management (NGAM) has launched the ASG Tactical US Market Fund (USMAX), an equity mutual fund from AlphaSimplex Group (ASG).

The fund seeks to participate in the upside of the US equity market while seeking to minimise the impact of the market’s downside during periods of extreme market stress. It may help investors stay invested in stocks during both favourable and challenging market environments.
"The new fund from ASG responds to investors’ need for additional tools to help them build and maintain durable portfolios for the long term," says David Giunta, president and chief executive officer, Natixis Global Asset Management – US distribution. "Innovative products such as this fund can help investors tune out the noise that accompanies market shifts and focus on achieving investment goals in a more risk-aware way."
The ASG Tactical US Market Fund provides exposure to the stock market through a portfolio of equity securities broadly representative of the US stock market. By using stocks and derivatives, the fund’s market exposure can be increased or hedged.
The level of the fund’s stock market exposure is determined using a proprietary risk-of-loss measure developed by ASG. When this measure indicates a favourable risk-return tradeoff, the fund uses derivatives to increase its equity market beta to as high as 1.3 (130 per cent sensitivity to changes in the stock market). If the measure indicates an unfavourable risk-return tradeoff, the fund uses derivatives to reduce its beta to as low as zero. The tactical flexibility of the fund to limit its market exposure at one extreme, and to exceed 100 per cent market equity exposure at the other extreme, implies the fund can respond to both rising and falling markets. The fund is not intended to be a complete portfolio and is generally limited to the US equity market.
"The ASG Tactical US Market Fund is designed for investors who want to capture the equity market’s long-term return but fear its worst declines," says Jerry Chafkin, president and portfolio manager at ASG. "We wanted to create an equity fund that would make it easier for investors to stay invested through both rising and falling markets by attempting to address investor concerns with regard to both potential losses and missing out on potential gains."
Andrew Lo, a thought leader in risk management and systematic investing, co-manages the fund with Chafkin and Alexander Healy of ASG. The stock portion of the portfolio is sub-advised by Active Investment Advisors, a division of NGAM Advisors. Reich & Tang Asset Management, a cash management specialist and NGAM affiliate, sub-advises the fund’s cash investments.

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