Last updated: 17:19 / Wednesday, 2 December 2015
For UK institutional investors

Schroders Launches First Volatility Controlled Equity Fund with Downside Protection

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Schroders Launches First Volatility Controlled Equity Fund with Downside Protection
  • The fund aims to give Schroders’ clients and investors exposure to global equities while maintaining a protected approach to volatility
  • This is achieved through exposure to a volatility targeted global equity index, with downside protection gained through a rolling program of monthly put options
  • Initial funding has been received from a UK final salary pension scheme under the advice of their investment consultant Redington

Schroders has launch the UK’s first volatility controlled equity fund with downside protection, designed specifically for UK institutional investors. The Schroder Volatility Controlled Equity Fund has been structured to offer investors equity exposure with downside protection, enabling clients to keep on track with their long-term goals.

The fund aims to give Schroders’ clients and investors exposure to global equities while maintaining a protected approach to volatility. This is achieved through exposure to a volatility targeted global equity index, with downside protection gained through a rolling program of monthly put options.

Initial funding has been received from a UK final salary pension scheme under the advice of their investment consultant Redington. The Schroder Volatility Controlled Equity Fund will be managed by the Multi-asset Investments and Portfolio Solutions (MAPS) team.

Andy Connell, Head of Portfolio Solutions at Schroders, commented: “We have seen a lot of interest from clients wishing to invest in the Schroder Volatility Controlled Equity Fund and we welcome the increasing recognition of the techniques we are using. The recent market volatility further supports the importance of having the control capabilities in the fund to manage the downside risks.”

Dan Mikulskis, Managing Director & Co-head of Asset Liability Modelling (ALM) at Redington commented: “Achieving clients’ investment objectives drives our investment strategy work and recommendations. We believe risk control and downside protection are two powerful tools for keeping clients’ portfolios on track for those long-term goals. We wanted a cost effective equity pooled fund that was easy to access and had these characteristics.”

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