Natixis Investment Managers (Natixis IM) plans to launch a smart beta fund for Asian equities by June, Citywire Asia can reveal.
Madeline Ho, managing director and head of wholesale fund distribution for Asia Pacific at Natixis IM Singapore said the new fund is a replicate of the global and European versions of its smart beta fund.
The fund – Natixis International Funds (Lux) I – Seeyond Asia MinVol Equity Income Fund – is a minimum variance equities product that is Asia-focused, she said.
It aims to outperform the MSCI AC Asia ex-Japan Dividend Net Reinvested Index over the fund's recommended minimum investment period of five years while aiming to offer income and reduced volatility.
The fund will invext at least two thirds of its total assets in Asian ex-Japan equity securities.
Ho said Natixis IM is currently in talks with private banks to carry the fund on their shelves.
The idea of having similar smart beta fund that is Asia-focused followed after its discussion with private banks and its clients on what they want and like.
‘We find some investors want to invest in Asia but they might not want to go full length. So, they wanted a lower volatility Asia equities strategies,’ Ho said.
The fund was initially conceptualised following its conversations with private banks, but Ho said Natixis IM feels it can extend the fund offering to retail investors too.
Ho said the global version of this smart beta fund – Seeyond Global MinVariance – was incepted in December 2013 and is also available to Asian investors. As of March 14, Seeyond Global MinVariance had about €301.35 million ($371.32 million) in assets.
Seeyond Global MinVariance and invests primarily in global companies around the world, according to the fund’s factsheet. The fund aims to offer attractive risk-adjusted returns through a model-based approach to risk reduction with a discretionary leeway.
Seeyond Global MinVariance seeks to construct a diversified portfolio of stocks that demonstrate low volatility and low correlation to each other. It also provides a complementary solution to pure fundamental stock picking strategies.
Ho said Asian investors largely prefer the Asia or global investment themes.
Seeyond, an affiliate of Natixis IM, specialises in active quantitative strategies which seek to optimally reward risk in equities strategies, multi-asset strategies as well as volatility and overlay strategies.