F-squared Investments has launched 18 indexes of best-of-breed actively managed mutual funds, called ActiFindexes, through a new platformcalled Active Index Solutions (AIS).
“The proposition underlying AIS’s ActiFindexes is that the best active mutual fund managers consistently add value over three-year rolling periods, and a portfolio of those managers will provide investors will higher retained returns,” said Ron Santangelo, former manager of Merrill Lynch’s managed solutions and analytics group and chairman of the AIS investment committee.
“The key,” Santangelo continued, “is to identify the minority of active managers who are skilled and talented enough to repeatedly and reliably outperform.” Independent consultants select which mutual funds will comprise each index.
F-squared is already in talks with investment firms to include the indexes in mutual funds, insurance products and a form of an actively managed exchange-traded fund, said Howard Present, co-founder and CEO of F-squared Investments.
The index platform is divided into three investment categories: retirement income, precision alpha/sector and risk-adjusted returns.
The retirement income category is then further broken down into large-mid value, large-mid blend and large-mid growth. The precision alpha/sector category is comprised of the six largest sector categories: technology, healthcare, financial services, utilities, natural resources and real estate.
Finally, the risk-adjusted return category is made up of nine indexes across value, core and growth across large-cap, mid-cap and small-cap.