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Posted on Dec 12, 06:21PM | IBNS
Edelweiss Asset Management Limited, known for value investing through quant strategies to generate superior risk-adjusted returns, on Wednesday announced the launch of Beta Overlay Over Mutual Funds (B.O.O.M), an open-ended product under its PMA business that aims to provide enhanced returns over long periods through better portfolio risk management.
The B.O.O.M Strategy aspires to offer equity investors the best of both worlds - allow investment in mutual funds and yet help restrict the volatility risk.
"B.O.O.M follows a rigorously back-tested model, which has consistently delivered better returns over a 10-year period," said Vikaas M Sachdeva, CEO, Edelweiss Asset Management Limited.
Equity mutual funds present one of the best routes to invest in equity market, having outperformed the Nifty Index in each of the last 10 years.
However, during periods of weakness in the markets, they may also end up giving negative returns.
This Strategy creates long term value by actively hedging the underlying long only equity component of the portfolio of equity mutual funds.
"The portfolio would be dynamically managed, maintaining long only equity exposure when markets are strong and hedging the long-only equity component of the portfolio with Nifty Futures, when markets are weak," said Peeyoosh Chadda, Head - Investment Advisory Group, Edelweiss Asset Management Limited.
B.O.O.M. follows an Edelweiss Proprietary Quant Model which has consistently delivered returns over a 10 year period.