Advantus Capital Management has filed a prospectus with the Securities and Exchange Commission for two new managed volatility funds.
Advantus plans to launch the mutual funds—the Advantus Dynamic Managed Volatility Fund and Advantus Managed Volatility Equity Fund—at the end of September 2015, with both Institutional and Class A shares available.
The Advantus Dynamic Managed Volatility Fund targets approximately 60 per cent equity exposure and 40 per cent fixed income exposure, with the ability to change the equity allocation to manage overall Fund volatility, primarily investing in S&P500 equities and holding long and/or short positions in S&P500 futures contracts.
The Advantus Managed Volatility Equity Fund targets approximately 85 per cent equity exposure and 15 per cent cash or cash equivalent exposure, with the ability to have a maximum effective equity exposure of up to 100 per cent. As market conditions change, the Fund’s effective equity exposure can change to manage overall Fund volatility, primarily investing in low volatility equities and S&P500 futures contracts and other derivative instruments.
The hedging process for both Funds seeks to target an average annualised volatility in the daily total returns of the Funds of approximately 10 per cent.
David Kuplic (pictured), CFA, and Craig Stapleton, CFA, will be the portfolio managers for the Funds. Both have demonstrated expertise and results leading managed volatility strategies at Advantus.