Natixis ASG Mutual Fund
Andrew Lo's Natixis ASG Diversifying Strategies FundAndrew Lo will manage Natixis Global Associates' latest hedge fund-like mutual fund, Natixis ASG Diversifying Strategies fund. The mutual fund will follow a risk-managed absolute-return strategy. Lo is a well-known voice in the hedge fund industry serving as the Chief Investment Strategist for Natixis and a professor of finance at MIT. The new fund may be the first mutual fund to actively manage a low-to-negative correlation to the major equity indexes by selling S&P 500 Futures when necessary.
Lo explains the new fund, “The largest source of risk in many investors’ portfolios is equity market risk. We designed this fund to answer a broad-based need for portfolio diversification with low to negative long-run correlation to the major equity markets within a liquid and transparent mutual fund vehicle.”
According to the Natixis press release:
The Natixis ASG Diversifying Strategies Fund is a U.S. ’40 Act fund, available only to U.S. investors through A, C and Y shares. Using highly liquid futures and currency forward contracts to gain desired exposures, AlphaSimplex seeks to deliver absolute returns through a diversified, actively managed global portfolio of long and short positions. Fund management employs multiple quantitative absolute-return models (e.g., trend models, macroeconomic factor models, and relative value models), actively adjusting weightings in response to changing market conditions. An annualized volatility target and a dynamic draw-down control mechanism help manage its risks. The minimum investment is $2,500 for A and C shares, $100,000 for Y shares1.
“The latest ASG fund is a result of our innovative approach to mutual fund development,” said John Hailer, president and chief executive officer of Natixis Global Asset Management, US and Asia, and head of NGA US and International distribution. “By addressing the current needs of average investors, including diversification away from the equity markets, reduced volatility and a goal of downside protection, Andrew Lo and the AlphaSimplex team continue to focus on making alternative approaches more accessible and affordable for individual investors.”
The new fund is the second U.S. mutual fund managed by AlphaSimplex Group. Last October AlphaSimplex launched the Natixis ASG Global Alternatives Fund which is based on a hedge fund industry beta replication strategy. In contrast, the new fund is based on proprietary AlphaSimplex strategies and attempts to maintain a low to negative correlation with equity markets even over periods as short as one year.
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