EUROPE – A global core equity product for European and other institutional investors is being launched tomorrow by US investment manager INTECH, part of Janus Capital.
The global strategy uses a universe of global securities, which are benchmarked to the MSCI World Index, and applies the firm’s mathematical investment process.
The target is an annualised average gross return longer term of between 2.5 and 3% above the benchmark and is seen as an addition to the Janus range of active global equity products.
INTECH said that it achieved this better upside “by capitalising on the natural price movement of individual stocks” and delivered it with “benchmark like risk”.
A pilot portfolio was funded with seed capital on December 22 2004 and up to 31 December 2005, produced a gross return of 15.74%, some 4.6% above the benchmark, INTECH claims. The strategy was launched after two years of research, INTECH said.
Robert Fernholz, chief investment officer of INTECH, said that the rigorous research undertaken and the encouraging results with the seed capital showed the potential to apply that same methodology top global equity portfolios” and to obtain the high information ratios achieved on the US equity strategies.
The manager’s approach is to identify stocks with high relative volatility and low correlations. Then, within specific risk constraints, the target weightings of these stocks are identified “to take advantage of the natural volatility of stock price movement”.
The strategy is available on a separate account basis and through institutional share class of the Janus World Funds Global Risk managed Core Fund, which is a Dublin-based structure.
INTECH has seen assets under management increase from $7.3bn in 2002 to $44.7bn at the end 2005. Last year saw net inflows of $16.1bn to INTECH which helped the group as a whole to its first positive net inflows of $2bn since 2000. At year-end, Janus had $148.5bn in AUM. Up to now, INTECH has only offered a range of US strategies.
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