Two asset managers including Aberdeen Standard Investments (ASI) have teamed up to offer a European equity fund with risk controls for insurance firms.
ASI is launching the Ucits fund in partnership with JP Morgan Mansart Management, part of JP Morgan bank but separate to JP Morgan Asset Management.
There are also plans to make the fund available to retail investors.
Called the Defensive European Equity Income Fund, ASI said the product aimed to provide investors with long-term income and capital appreciation while reducing volatility.
It is also designed to help insurers manage the Solvency II regulation. While ASI manages the investments, JP Morgan Mansart manages a “rolling collar overlay” – a method of reducing volatility risk using options – which the firms said is appropriate for the solvency environment.
The product – which has €100 million of starting capital – stems from ASI’s European equity income strategy, which was launched in April 2009.
Shahzad Sadique, chief executive of JP Morgan Mansart, said: “In the current market environment, investors are looking for different ways to access European equities. The combination of a systematic overlay with daily liquidity, transparency and the active management of ASI, offers investors an innovative route into this market.”
The fund is domiciled in Ireland and is registered for sale in countries across Europe, including France, Germany, Spain, Italy, Switzerland, UK and Ireland.
The benchmark is the FTSE World Europe ex UK index and the annual management charge for the institutional share class is 0.8% with an ongoing cost of 0.95%.
The minimum investment is currently €1 million, but the firms are to make a retail share class available.
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