Investec Structured Products is providing investors with the potential of long-term capital growth which tracks the performance of the 30 least volatile stocks from the 100 largest companies listed in the UK via a new fund linked to the EVEN 30 Index.
The UK Controlled Volatility Fund, a sub-fund of Objective Returns plc, will track and provide exposure to the EVEN 30 Index.
The EVEN 30 Index is a lower volatility alternative to the FTSE 100 Index. It tracks the 30 least volatile stocks from the 100 largest companies listed in the UK.
Stocks within the index are equally weighted and re-selected on a monthly basis. A key feature of the EVEN 30 Index is a volatility control which in highly volatile markets can reduce exposure to the 30 constituent stocks to ensure a low risk profile.
In addition to providing capital growth, the UK Controlled Volatility Fund will distribute any dividends paid by the stocks within the EVEN 30 Index. As at 1 April 2013, the dividend yield from the EVEN 30 Index is 3.79 per cent. The EVEN 30 Index is published daily and has been live since September 2010.
Based on back tested data over the three years leading up to February 2014 the accumulation share class of the fund would have risen 40.61 per cent, after deduction of annual management fees. Over the same period the FTSE 100 Total Return Index had risen 23.28 per cent, exclusive of any fee deduction.
The fund is the first of four fund launches by Investec Structured Products in 2014 and will be passively managed by the Investec Structured Products team. It is the second open-ended fund launch, the first being the Income Booster Fund (launched in October 2013) which employs a strategy linked to the FTSE 100 Index and targets an income of 7.5 per cent per year with potential for capital growth.
Gary Dale, head of intermediary distribution at Investec Structured Products, says: “This is a timely launch as the UK Controlled Volatility Fund will aim to exploit inefficiencies in the market that have hitherto remained relatively unexploited by investors. By basing a fund on a lower volatility index, we are enabling investors to reduce their risk profile whilst retaining their equity exposure.
“However, lower volatility does not necessarily mean lower returns. The EVEN 30 Index has consistently outperformed the FTSE 100 but with a lower level of volatility, meaning investors should consider using this offer as a part of a balanced portfolio.”
The fund will sit within the IMA UK Equity Sector. Accumulation and income share classes are available. The minimum investment is GBP3,000. There are no initial charges and the annual management charge is 0.75 per cent.
