Investec Structured Products is launching a European version of its UK Controlled Volatility fund.
Set to launch in the first quarter of next year, the passive fund will track a proprietary index recently created by the firm. The Euro 70 index is comprised of the 70 least volatile stocks from 300 of the largest companies in 15 developed European companies, evenly weighted and rebalanced monthly.
The new fund will closely resemble the Investec Qtrac – UK Volatility fund, an Irish-domiciled Ucits vehicle that launched in March this year. The UK mandate tracks the Even 30 index, which is formed of the 30 least volatile stocks in the FTSE 100, also evenly weighted and rebalanced monthly.
Targeting long-term capital growth while aiming to minimise risk, the UK Controlled Volatility offers both accumulation and income shares. Cash commensurate to the dividends paid by the constituent stocks in the index are distributed quarterly.
Gary Dale, head of intermediary sales for Investec Structured Products, says: “We see the passive funds business as a big opportunity and are leveraging skills from our equity derivatives desk. Passive funds have a real place to fill, but they need to be smart beta. To me that means a more efficient use of the market to get market returns.”
The firm also has an Income Booster fund in its passive fund range, which launched in October 2013. A US tracker fund is also in the pipeline – an S&P 40 index is currently being built in house.
Dale adds: “I would like to see Investec’s passive funds as a standalone business.”
Charges on the existing funds are set at 0.5 per cent while the firm has just announced an additional share class for wealth managers with a fee of 0.15 per cent (TER) for those investing over £1m.