Bridgehouse Asset Managers today launched Lazard Global Low Volatility, whose managers' performance goal is to beat its global-equity benchmark over a full market cycle with lower volatility.
Sub-advised by New York-based Lazard Asset Management, the fund will invest exclusively in large-cap liquid stocks that are constituents of the MSCI World Index of developed markets. The fund will have no exposure to emerging-markets stocks.
A nine-member team led by Paul Moghtader, a managing director and portfolio manager at Lazard, will employ proprietary models to rank shares of high-quality companies on the basis of relative valuation, earnings quality, growth capability and market sentiment.
In determining which of the ranked stocks make it into the portfolio of between 175 and 250 names, Lazard applies a portfolio-optimization process. This ensures broad diversification by sectors, industries, countries and regions, and individual securities, and is style neutral with no significant tilt toward either growth or value. There's a limit of 20% on holdings in any one sector, and 2% in any one stock.
Unlike many low-volatility mandates that are based strictly on rules-based quantitative criteria, the Lazard managers can make judgment calls. Each holding is reviewed by team members, who can seek input from Lazard's global equity analysts.
The new fund's strategy is based on a managed-accounts mandate in the United States with a track record dating back to January 2010. From inception through June 30 of this year, the mandate has returned 12.32% before fees in U.S. dollars, versus 9.75% for the MSCI World Index.
And it did so with a standard deviation that was about 32% lower than that of the index. This was well in line with the Lazard team's risk-management target of having volatility of 20% to 40% below the index over a full market cycle.
Past performance of course, is no guarantee of future returns, and management fees and expenses will reduce returns for Canadian mutual-fund investors. Lazard Global Low Volatility's management fee is 1.90% for Series A, which has front-end, deferred-sales-charge and low-load purchase options. Fee-based and high-net-worth purchase options are also offered.
Also launched today by Bridgehouse were two other retail mutual funds, including Greystone Canadian Equity Income & Growth Class. It's a Canadian dividend and income fund managed by Greystone Managed Investments Inc., a growth-style manager based in Regina.
The third new offering is Brandes Global Equity Class, a corporate-class version of an existing fund. Bridgehouse is the trade name of Brandes Investment Partners & Co.
