- We wanted to provide a strategy to investors who may be under-allocated to volatility-controlled (risk-reducing) products, e.g., products that can hedge on the downside. Over the recent 10-year equity bull market, some investors over-allocated to higher risk assets, increasing their potential vulnerability to a market correction like the one experienced in early 2020 as a result of the COVID-19 pandemic. MVIN has the potential to help investors address overexposure to higher-risk equity.
- We found through our testing that many investors are seeking portfolio diversification. MVIN selects stocks based on their risk profile, rather than their return potential. Investment strategies that do this are rare and have the ability to exploit a phenomenon known as the “low volatility anomaly.” This anomaly has found that the lowest volatility stocks across all geographies can outperform stocks of higher risk over a full market cycle. By working to exploit the low volatility anomaly, MVIN provides investors with the potential to generate strong absolute and risk-adjusted returns.
- Many US investors remain under-allocated to non-US stocks. The reasons for this can include home country bias, the belief that US stocks carry less risk, and the fact that US stocks have outperformed international stocks during the latest 10-year bull market.
Exchange-traded funds (ETFs) trade like stocks, are subject to investment risk, and will fluctuate in market value. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than the ETF's net asset value. Transactions in shares of ETFs will result in brokerage commissions, which will reduce returns. Unlike typical exchange-traded funds, there are no indexes that the Fund attempts to track or replicate. Thus, the ability of the Fund to achieve its objectives will depend on the effectiveness of the portfolio manager. There is no assurance that the investment process will consistently lead to successful investing. Volatility management techniques may result in periods of loss and underperformance, may limit the Fund's ability to participate in rising markets and may increase transaction costs. Equity securities are volatile and can decline significantly in response to broad market and economic conditions. Foreign securities may involve heightened risk due to currency fluctuations. Additionally, they may be subject to greater political, economic, environmental, credit, and information risks. Foreign securities may be subject to higher volatility than US securities, due to varying degrees of regulation and limited liquidity. Currency exchange rates between the US dollar and foreign currencies may cause the value of the fund’s investments to decline.
All investing involves risk, including the risk of loss. Diversification does not guarantee a profit or protect against a loss.
This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions expressed above may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted.
ALPS Distributors, Inc. is the distributor for the Natixis Seeyond International Minimum Volatility ETF. Natixis Distribution, L.P. is a marketing agent. ALPS Distributors, Inc. is not affiliated with Natixis Distribution, L.P.
Seeyond is operated in the U.S. through a participating affiliate arrangement with Natixis Advisors, L.P.