BNY Investments introduces adaptable risk management mutual fund
The BNY Adaptive Risk Overlay Fund, managed by BNY Investments Newton, has been launched for UK and European investors seeking a tail-risk hedging solution within a pooled vehicle under the UCITS framework. This innovative proposition aims to provide protection against rare but severe market downturns, or "tail risks," while maintaining daily liquidity for investors.
The fund, managed by portfolio manager Lars Middleton, functions as a diversifying overlay by complementing and reducing downside risks within an investor’s existing core portfolio holdings. The objective is to enhance portfolio resilience by managing risk and potentially generating positive returns when equity markets are under stress, thereby acting as a counterbalance during volatile periods.
The BNY Adaptive Risk Overlay Fund is linked conceptually to the Newton Adaptive Risk Overlay Index, developed in collaboration with Bank of America, which supports the fund’s systematic approach to risk management. This fund benefits from Newton's longstanding track record of over two decades in managing absolute return funds through volatile market periods.
Gerald Rehn, head of Emea distribution at BNY Investments, stated that the fund aims to help manage portfolio risk during times of increased uncertainty. The BNY Adaptive Risk Overlay Fund is available to UK and European investors, including those in Denmark, France, Germany, Italy, Spain, Sweden, and The Netherlands.
In summary, the BNY Adaptive Risk Overlay Fund offers a liquid, professionally managed strategy to help investors in the UK and Europe better navigate and reduce the impact of sudden market downturns through systematic tail risk hedging integrated as an overlay to their existing portfolios. The fund is managed by BNY Investments Newton, a subsidiary of BNY Investments, a subsidiary of The Bank of New York Mellon Corporation.
| Feature | Description | |---------------------------------|----------------------------------------------------------------------------------------------| | Manager | BNY Investments Newton (portfolio manager Lars Middleton) | | Investment objective | Positive returns during global equity volatility; tail-risk protection | | Investment structure | Tail-risk hedging in pooled, liquid UCITS fund | | Role in portfolio | Diversifying overlay complementing core holdings; risk reduction | | Target investors | UK and European investors (including Denmark, France, Germany, Italy, Spain, Sweden, Netherlands) | | Special framework/partnership | Uses Newton Adaptive Risk Overlay Index; partnership with Bank of America | | Liquidity | Daily liquidity |
- This tail-risk hedging solution within the UCITS framework, known as the BNY Adaptive Risk Overlay Fund, is an investable strategy designed specifically for UK and European investors, aiming to generate positive returns during global equity volatility and provide tail-risk protection.
- As a diversifying overlay, the BNY Adaptive Risk Overlay Fund, managed by BNY Investments Newton, functions to complement and reduce downside risks within an investor’s existing portfolio holdings, thereby acting as a counterbalance during volatile periods, particularly during times of increased uncertainty.
