FVC’s Suzi Hampson examines why volatility controlled indices are an integral part of the structured products universe.
Volatility controlled indices are a type of index that use algorithms to maintain a target level of volatility by adjusting exposure to a selected basket of assets. Index providers continue to innovate and create new indices and there is a new generation of volatility-controlled indices that seeks to increase the frequency of rebalancing These complex underlyings have long been part of the structured product universe. Generally, they represent lower volatility versions of their respect