Natixis Global Asset Management has launched an international hedged equity fund to bet on international equity.
The Gateway International Fund invests in a broadly diversified portfolio of 200-400 international stocks that seeks to track the performance of the MSCI EAFE Index. As a hedge, the fund actively sells index call options and buys index put options on the same six indexes.
It will be managed by co-portfolio managers Michael Buckius and Kenneth Toft of Gateway. Buckius also co-manages the firm’s flagship fund, the Gateway Fund. The fund will charge 75 basis points for management fees.
“With continued volatility creating uncertainty and more investors looking abroad for growth, the time is right for a risk-managed approach to the international developed equity market,” said J. Patrick Rogers, president and chief executive of Gateway Investment Advisers, in a statement. “We believe our fund is the first to use index option contracts to hedge risk in this market, an approach we have used successfully for over 30 years in the U.S. market with the Gateway Fund.”
The blended portfolio represents over 90% of the equity exposure of the MSCI EAFE Index. Certain countries are excluded due to small index representation and/or undeveloped index option markets. Periodic rebalancing is conducted to approximate MSCI EAFE Index country weights.
“Sustained market volatility has caused investors to focus more attention on investment risk,” stated David Giunta, president and chief, Natixis Global Asset Management, U.S. Distribution. “A low volatility approach to international equity, such as Gateway’s, can be a building block in a durable portfolio designed to help minimize the risks inherent in changing markets and meet return objectives over time.”
In other firm news, Natixis also unveiled its new Durable Portfolio Construction platform to help individual investors, financial advisors and institutional investors address growing concerns about risk and market volatility in global markets. The NGAM Durable Portfolio Construction platform focuses on portfolio construction and analytics to help investors manage volatility and enhance the diversification of their portfolios.
Tommy Fernandez writes for Money Management Executive.