Important legal information

The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.

The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.

Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is Robeco Switzerland AG, Josefstrasse 218, 8005 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.

Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/Robeco Switzerland product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/Robeco Switzerland offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.

This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.

I Disagree
Getting the most out of low-vol investing

Getting the most out of low-vol investing

27-08-2012 | Insight

Do you know why it makes sense to invest in an enhanced low-volatility strategy rather than a generic alternative?

  • Pim  van Vliet, PhD
    Pim
    van Vliet, PhD
    Managing Director, Head of Conservative Equities - Pim van Vliet

That is just one question answered by Pim van Vliet, Senior Portfolio Manager of Robeco Conservative Equities, in a new FAQ on low-volatility investing.

So why does opting for an enhanced low-volatility strategy make sense? As Van Vliet explains, it is because an enhanced strategy, such as Robeco Conservative Equity, can overcome some serious pitfalls associated with low-volatility investing.

“Generic low-volatility strategies, which may be based on a single backward-looking statistical risk measure, such as volatility or beta, are exposed to unnecessary downside risk, high turnover in illiquid stocks and concentration risks,” he explains.

By contrast, the Robeco Conservative Equity strategy captures the low-volatility premium more efficiently by reducing risk and enhancing return. Risk is reduced by using a combination of statistical risk variables and by including forward-looking risk measures based on a proprietary distress-risk model. Meanwhile, returns are enhanced by selecting low-volatility stocks which also have attractive valuation and sentiment characteristics.

“Not every low-volatility stock is created equal: some are destined to perform better than others,” observes Van Vliet. “We improve risk-adjusted returns by selecting low-volatile stocks that also have attractive return potential.” Chart 1 shows the difference between Robeco Conservative Equity and a generic low-volatility strategy.

‘Generic low-volatility strategies are exposed to unnecessary downside risk, high turnover in illiquid stocks and concentration risks’

Stay informed on our latest insights with monthly mail updates
Stay informed on our latest insights with monthly mail updates
Subscribe

Chart 1: Risk & return characteristics of Conservative Equity vs generic low-volatility strategy

Source: Robeco