FTSE Group has launched the FTSE Global Minimum Variance Index Series, a new family of gauges aimed at delivering reduced index volatility and providing potential improvements to the risk reward trade-off.
"In the current economic environment and given the nature of equity market returns in recent years, investors are increasingly interested in lower volatility investments which concentrate on improving their risk return profile while maintaining their allocation to global equity markets," said Peter Gunthorp, managing director, research and and analytics at FTSE Group.
Gunthorp said that the volatility reduction is achieved using an intuitive, rules-based approach which minimises historical variance and results in a broad index which is diversified across country, industry and stock levels.
Based on the firm's FTSE All-World Developed Index Series, the FTSE Global Minimum Variance Index Series has been designed to provide investors with an alternative to traditional cap weighted approaches, while maintaining full allocation in the relevant equity market.
The global series follows the launch of the FTSE 100 Minimum Variance Index and includes the FTSE Developed Minimum Variance Index; the FTSE Developed Europe Minimum Variance Index; the FTSE Eurobloc Minimum Variance Index; the FTSE Developed Asia Pacific Minimum Variance Index; the FTSE USA Minimum Variance Index; and the FTSE Japan Minimum Variance Index, among others.