Ossiam, the smart beta ETF specialist and affiliate of Natixis Global Asset Management (NGAM), is expanding its offering of exchange-traded funds with the launch of the Ossiam Global Multi-Asset Risk-Control ETF (EUR) (ISIN: LU1446552496)…
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Bruno Poulin, CEO of Ossiam
The new fund, listed on Xetra, follows a systematic rules-based approach which invests in ETFs tracking a variety of asset classes. It gives investors exposure to a broad asset mix of equities, bonds, commodities, real estate and cash-equivalent assets, managed with the intention of controlling the maximum drawdown of the total portfolio.
The fund tracks the Global Multi-Asset Risk-Control Index, a rules-based benchmark which reflects a long exposure on a combination of a “Risky Assets Portfolio” and a “Cash Portfolio”. The Risky Assets Portfolio comprises ETFs providing exposure to Western equities, Western treasury bonds, emerging markets (equities and bonds), corporate bonds, commodities, and real estate. The underlying ETF constituents of the Risky Assets Portfolio are weighted in accordance with the principles of a mean-variance optimization so as to maximize the expected return while minimizing the expected volatility of the portfolio. The Cash Portfolio comprises money market ETFs, which track the EONIA (Euro OverNight Index Average).
The maximum drawdown control mechanism embedded in the Index methodology dynamically allocates between the Cash and the Risky Assets Portfolios, with the objective of keeping drawdowns of the Global Multi-Asset Risk-Control Index below 8%. The Index has a variable exposure of minimum 43% (maximum 100%) to “Risky Assets” ETFs and maximum 57% (minimum 0%) to ‘cash’ ETFs.
The index’s standard rebalancing is performed on a quarterly basis, on top of that optional rebalancing allows for a dynamic review of the strategy’s exposures when market conditions worsen as volatility spikes.
Bruno Poulin, CEO of Ossiam, said, “Our new ETF addresses growing investor interest in systematic rules-based and risk-controlled investment solutions, which invest cost-effectively and transparently in a broadly-diversified portfolio of different asset classes. Risk control, which is a particular focus of the ETF, serves to control losses in the event of major market corrections. The fund is aimed at investors who seek relatively low and clearly limited risk. Offering such a solution in an ETF format reinforces Ossiam’s positioning as a provider focused on innovative value-adding strategies.”
The ETF’s total expense ratio is 0.55% per year. The new ETF is registered for sale in Germany and Austria, and is marketed and sold by NGAM.