Global Equity Lower Volatility
Provides exposure to low beta, quality and value factors with the potential for better risk-adjusted returns than the cap-weighted index.
Our philosophy
Lower volatility strategies offer characteristics that could provide investors more flexibility in asset allocation decisions:
- A smoother performance pattern
- Lower drawdowns which can help preserve capital in down markets
- Better risk-adjusted returns than the cap-weighted index.
Our process
- Our lower volatility strategies are differentiated by design, combining quantitative discipline and qualitative judgment
- We identify and rank quality stocks with attractive profitability and valuation profiles
- We use diversification through minimum variance optimisation to create a low volatility portfolio, balancing low volatility names and less correlated, higher volatility names to reduce absolute risk
- This portfolio includes less correlated, higher volatility names to reduce absolute risk
- Fundamental research focuses on confirming the volatility outlook for each stock and whether its profitability is sustainable
HSBC strengths
- We harness the intellectual capital of a global network of over 200 equity specialists in 20+ countries and territories
- Our fundamental research adds value within a disciplined framework
Key risks when investing
- Investment risk: The value of investments and any income from them can go down as well as up and investors may not get back the amount originally invested. Lower volatility may result in a lower return relative to the reference index.
- Exchange rate risk: Investing in assets denominated in a currency other than that of the investor’s own currency perspective exposes the value of the investment to exchange rate fluctuations
- Emerging markets risk: Investments in emerging markets are by their nature higher risk and potentially more volatile than those inherent in some established markets
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