Cash & Liquidity ManagementInvestment & FundingInvestment ManagementFTSE Launches Global Minimum Variance Index Series

FTSE Launches Global Minimum Variance Index Series

Global index provider FTSE Group has launched the FTSE Global Minimum Variance Index Series, which it said aims to deliver reduced index volatility and thereby offer potential improvements to the risk reward trade-off.

The new index series is based on the widely adopted FTSE All-World Developed Index Series, and provides investors with an alternative to traditional cap weighted approaches, while maintaining full allocation to the relevant equity market. The global series follows on from the launch of the FTSE 100 Minimum Variance Index Series.

FTSE added that investors looking for a broad, diversified and investable portfolio incorporating a low volatility/variance objective may wish to use the new series to support these objectives. Volatility reduction is achieved using an intuitive, transparent rules-based approach that minimises historical variance and results in a broad index which is diversified across country, industry and stock levels.

Key features of the new global product are that it: 

  • Targets a more efficient investment portfolio through reduced volatility.
  • Diversified index outcomes.
  • Transparent approach with minimal constraints.
  • Expected returns play no role.
  • Academic evidence of a low volatility effect.

“In the current economic environment and given the nature of equity market returns in recent years, investors are increasingly interested in lower volatility investments which concentrate on improving their risk return profile, while maintaining their allocation to global equity markets,” said Peter Gunthorp, managing director of research and analytics at FTSE.

Related Articles

Investors play down China trade war fears as domestic market soars

Investment & Funding Investors play down China trade war fears as domestic market soars

2m Simon Milne
Risky business?

Capital Markets Risky business?

2m Nina Brumma
How to trade bitcoin: an exploration of popular bitcoin exchanges

Investment & Funding How to trade bitcoin: an exploration of popular bitcoin exchanges

3m Michael McCaw
What is the function of corporate treasury?

Cash Management What is the function of corporate treasury?

3m Michael McCaw
"The architecture of financial markets has changed": Stefan Bielmeier, DZ Bank

Automation "The architecture of financial markets has changed": Stefan Bielmeier, DZ Bank

4m Victoria Beckett
China’s regulatory changes stimulate international interest

Asia Pacific China’s regulatory changes stimulate international interest

4m Michael McCaw
Why Ferguson Plc opts for floating rate debt: Bellin 1TC conference day 2

Capital Markets Why Ferguson Plc opts for floating rate debt: Bellin 1TC conference day 2

4m Victoria Beckett
Cold comfort for SMEs amidst Carillion bankruptcy

Economy Cold comfort for SMEs amidst Carillion bankruptcy

4m GTNews