Intech has launched the Alpha Capture Index strategy as a passive alternative to capitalization-weighted indexing. Intech says the strategy has the potential to outperform a market-cap-weighted index and is more stable than an equal-weighted portfolio.
The strategy combines an equal-weighted index and a cap-weighted index using a patented investment process and proprietary trading innovations.
The strategy seeks to deliver 50 to 60 basis points above the cap-weighted index gross of fees, to have portfolio turnover averaging 8%, low fees and a tracking error of 1.5% to 2.0% gross of fees.
The investment offering is currently managed against three benchmarks: the S&P 500 Index, Russell 1000 Index and MSCI World Index.
“Unlike Intech’s active strategies, the Alpha Capture Index strategy is a pure passive approach based on Stochastic Portfolio Theory,” said Jennifer Young, president and co-CEO of Intech. “It allows investors the opportunity to potentially outperform a cap-weighted benchmark with low tracking error and is an alternative to cap-weighted passive indexes as well as other semi-passive offerings. For almost 24 years, Intech has been an innovator in the research and development of mathematically based volatility-capture portfolios, which have enabled Intech to generate alpha over time.