The company, a subsidiary of Boston-headquartered Natixis Global Asset Management, said the Luxembourg domiciled Sicav can invest in a broad universe of assets in order to “capture market rallies”, while also using a firm underlying risk balancing strategy to mitigate market falls.
Natixis explained that, unlike traditional risk parity allocation strategies which invest in a single asset class, the new fund will be able to purchase assets such as bonds, equities, commodities, real estate and volatility instruments, among others. However, it added that the fund will mainly use highly liquid assets such as ETFs and futures.
The asset manager said each major asset class will represent one third of the portfolio’s risk budget, with each subcategory also risk balanced.
In a statement, Natixis said: “The risk parity approach aims to achieve a more consistent performance and a better risk/reward ratio than a traditional balanced allocation, in which equities represent a much larger share of overall risk than their relative weight in the portfolio.”
Management of the fund will be lead by global allocation specialists Michael Aflalo and Pierre Radot who will apply a top down approach. In addition, the team will use propriety quantitative tools which will analyse macroeconomic fundamentals and “the determination of the position in terms of market cycle”.
The Ucits structured fund has been registered for sale in the UK, Germany, France, the Netherlands, Italy and Spain and is euro denominated. Minimum investment is €100.
