Goldman Sachs Asset Management has launched a range of Ucits funds based on alternative weighted benchmarks that enable investors to gain market exposure while limiting volatility.
The funds will be based on a set of S&P Dow Jones indexes, the Global Intrinsic Value Index (GIVI) range, which are based on an alternative weighting scheme rather than the traditional market cap-weighted method.
The S&P GIVI Global Growth Markets Tilt index is designed to combine growth and value characteristics. The index is a combination of the S&P GIVI indexes, which are based on low volatility and alternative weighting schemes, with the S&P GIVI GDP weighted indexes.
While the S&P GIVI indexes’ method weights stocks by their intrinsic value, rather than market capitalisation, the S&P GIVI GDP Weighted indexes apply alternate country weights derived from their gross domestic product.
Jim O’Neill (pictured), chairman of GSAM, said: ‘We see more and more investors looking beyond classic market beta for factors that influence performance and risk.
‘There are several factors behind this development – not least the volatility that we have seen in recent years but also the rise and importance of the growth markets.'
‘In our view, it’s time that new and innovative ways of managing money against differently constructed benchmarks are considered.’
He said the GIVI concept removes 30% of the stocks with the greatest historical volatility, and weights the remaining stocks by their estimated economic worth rather than on the basis of market cap.