Ossiam adds income-distributing share class to FTSE 100 Minimum Variance ETF

Mar 11th, 2015 | By | Category: Equities

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Ossiam, a leading provider of smart beta exchange-traded funds, has introduced a distributing share class to the Ossiam FTSE 100 Minimum Variance UCITS ETF.

Ossiam adds income-distributing share class to FTSE 100 Minimum Variance ETFThe Paris-based asset manager has added the new share class in response to investor demand.

The fund, which holds a five-star Morningstar rating, is listed on the London Stock Exchange and is linked to the FTSE 100 Minimum Variance Index.

This index is designed to minimise the volatility of the FTSE 100 Index based on historical return information, including the variance and correlations of constituents, thereby offering potential improvements to the risk reward trade-off of the index.

Additional constraints on the weight of a single stock (< 4.5%) and the weight of an individual industry (<20%) ensure the index is investable and diverse. Presently, the index’s five largest holdings are Direct Line Insurance, Imperial Tobacco, Admiral, Sky and Randgold Resources; none of which make the top five in the conventional FTSE 100.

Since inception on 16 November 2011, the fund has outperformed (+58.56% vs. +39.93% for the FTSE 100 TR Index) the FTSE 100 with lower volatility (10.68% vs. 12.77%) (as of 31 January 2015).

The new share class (UKMD) has a total expense ratio of 45 bps and uses physical replication. It is eligible for use in ISAs and SIPPs and will distribute a dividend on an annual basis.

The fund is part of Ossiam’s broader minimum variance suite, which offers investors access to well-diversified and less volatile variations of well-known exposures. Their approach aims to deliver optimised portfolios that include a selection of stocks where volatility is among the lowest in the investment universe and historical correlations are moderate enough to allow for risk reduction.

As of end of February 2015, Ossiam had $2.47 billion in assets under management, consisting of ETFs and institutional mandates.

Ossiam is an affiliate of Natixis Global Asset Management.

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