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Low volatility investing

Proven downside protection with a stable source of income
Conservative equities is our active approach to low volatility investing. It is based on the anomaly that low-risk stocks tend to deliver a higher risk-adjusted return than high-risk stocks, contrary to classical finance theories. An approach that leads to a portfolio that offers stable equity returns and tend to generate high dividends.
Guide to low volatility
  • Global strategy since
    2006
    Proven track record
  • Risk-adjusted outperformance
    3.4%
    As of March 2019*
  • Assets
    € 21 bn
    As of March 2019
* The risk-adjusted outperformance is defined as Jensen’s alpha against the MSCI World Index (net return), based on monthly investment returns in EUR, gross of fees, for Robeco QI Institutional Global Developed Conservative Equities as a representative of the strategy. In reality, management fees and transaction and other costs are charged. These have a negative effect on the returns shown. The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.
Our low volatility strategies

Stable equity returns tend to come with high income

We think it is unwise to select stocks purely based on risk considerations, ignoring the price you pay for them. This is why we also consider valuation and momentum factors to enhance returns. This approach leads to a portfolio that offers stable equity returns and tends to generate high dividends.

  • Dividends are a significant and stable source of equity returns
  • Dividend yield is one of the most defensive measures of value
  • High dividends help enhance long-term returns and limit drawdowns
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The average return services are based on the net asset values of Robeco QI Institutional Global Developed Conservative Equities, from October 2006 (inception) until December 2017, gross of fees.

In reality, management fees and other costs are charged. These have a negative effect on the returns shown. The fund and its reference indices have been hedged for currency risk since 30 June 2012. The value of your investments may fluctuate. Results obtained in the past are guarantee for the future.

Winning by losing less in down markets

Better capital preservation can be achieved due to a significant reduction of losses during down markets. In a very bullish environment, the strategy could lag the overall market, while still delivering solid absolute returns. Once the market recovers, low volatility stocks have to make up less lost ground.

How to apply the Conservative strategy in a portfolio


Risk reduction

Risk reduction
A pension fund with a low funding level after the financial crisis replaced conventional equities with Conservative equities to reduce risk while not giving up equity returns.


Income-generator

Income generator
A bank decided to include Conservative equities in its defensive income model portfolio, as the strategy combines high dividend yield with lower downside risk.


Diversification

Diversification
A family office added the Conservative equity strategy to its portfolio of higher risk equity funds, in order to stabilize the overall performance.


Sustainability

Sustainability integration
An environmentally aware pension fund wanted to limit the ecological footprint, increase the ESG profile and reduce risk and therefore invested in the Conservative sustainable equity strategy.

Proven track record

For over ten years, we have been offering a distinctive approach to low-volatility investing, based on award-winning research.
  • First multi-factor models developed in 1994
  • First Conservative equity strategy launched in 2006
  • A wide range of strategies: global developed, European, emerging, all countries, US and sustainable

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Robeco’s Blitz wins award for low volatility article
Robeco’s Blitz wins award for low volatility article
Robeco’s Head of Quant Research has won a prestigious award for an article on hedge funds and the low volatility anomaly.
04-09-2019 | Insight
Media spotlight does not drive the Volatility effect in equities
Media spotlight does not drive the Volatility effect in equities
Investors’ appetite for stocks frequently mentioned in the news is often raised to explain the Volatility effect.
26-06-2019 | Insight
Guide to low volatility investing
Guide to low volatility investing
This new edition includes recent figures and a new section on income generation.
28-05-2019 | Insight
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