Amundi Absolute Volatility World Equities

The fund targets returns of 7% p.a. through a multi strategy investment process designed to exploit the mean reverting characteristics of volatility. The fundamental premise is to buy volatility when it is low and to sell when it is high. The first driver of returns is this directional exposure to volatility, which is then supplemented by two further return engines — the volatility of volatility as well as tactically exploiting shifts in volatility between geographic regions. At points in the market cycle this strategy has worked extremely well with the fund returning over 25% in 2008 and 5% in 2011. However with aggressive monetary stimulus keeping volatility at low levels the strategy has faced a challenging backdrop, and more recent returns have disappointed. As these extraordinary measures are withdrawn we believe this will allow volatility to normalise which should bode well for the strategy. Over time the Fund has exhibited negative correlation to equity markets and has acted as a good diversifier to broader portfolios. We regard the Fund as a valuable instrument to gain exposure to volatility in a daily dealt UCITS format