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UBS Global Asset Management launches two new alternative beta passive OEICs


UBS Global Asset Management has launched two alternative beta passive OEIC funds, the UBS FTSE RAFI Developed 1000 Index Fund and the UBS MSCI World Minimum Volatility Index Fund.

The funds are benchmarked to the FTSE RAFI Developed 1000 QSR Index and the MSCI World Minimum Volatility GBP optimised Index, respectively.
These two news funds, launched on the back of client demand, are currently available to institutional investors and it is anticipated that the retail share classes will be issued in the near future.
UBS has been managing passive equity mandates for over 30 years, moving into the alternative beta market in 2010. The indexing team of UBS has extensive knowledge and experience in alternative beta and currently manages over GBP 11bn benchmarked to non-market cap weighted indices.
UBS launched three UK Life Funds benchmarked to alternative beta indices in April 2014, with a further two later that year.
Ian Barnes, Head of UK & Ireland, says: “Whilst market cap weighted indices have many advantages, including broad diversification and high liquidity, they do have a systematic flaw. This flaw may mean investors can end up holding more stock that is overvalued and less that is undervalued – the opposite of what many would see as most pragmatic.
"We are seeing more investors in the UK recognise the benefits that alternative beta strategies can bring to a portfolio. In many instances clients are opting for a combination of passive strategies, tracking both traditional and alternative indices to diversify exposure across several risk factors and drivers of returns."

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