Invesco has expanded its suite of low volatility products by launching the Invesco Low Volatility Emerging Markets Fund.
Managed by Invesco Quantitative Strategies (IQS), the strategy will seek to outperform the MSCI Emerging Markets index over the long term with a lower risk profile.
"Invesco continues to provide investors alternative beta solutions such as actively managed low volatility strategies that have the potential to deliver higher risk-adjusted returns and help to preserve wealth during stressed market cycles," says Donna Wilson, director of portfolio management for IQS. "Managing volatility can help investors diversify their equity allocation beyond the traditional active and passive benchmark-centric strategies.
"Equity market risk is generally high compared with other asset classes, especially when considering emerging markets equity. We will seek to achieve a competitive long-term return while targeting a level of total risk (volatility) lower than the market index by relaxing traditional benchmark-centric constraints (e.g. country/sector exposures, market capitalisation, and style). This creates a very broad opportunity set, allowing us to seek out securities with the most attractive risk/return profile."
With approximately USD24bn in assets under management, IQS has been offering actively managed global and regional low volatility strategies since 2005, primarily to institutional investors. On 31 July 2013, Invesco transitioned two long-standing US and Global Core Equity retail funds managed by IQS to focus on lower volatility and higher yield, providing investors the opportunity to seek a competitive long-term total return with an emphasis on both higher dividend income and lower volatility.
Low volatility strategies can be attractive for investors looking for potential risk reduction or return enhancement while maintaining exposure to the equity markets.
The Invesco Low Volatility Emerging Markets Fund now joins Invesco Low Volatility Equity Yield Fund and Invesco Global Low Volatility Equity Yield Fund to provide greater depth and optionality to Invesco's suite of low volatility products.