Managed volatility

Lower volatility doesn’t have to mean lower returns. Managed volatility funds can help you strike a balance between risk and return.

Investors can overpay for higher volatility stocks in anticipation of higher returns. The reality is that the reward isn’t always there. Managed volatility funds seek to exploit this anomaly by avoiding high-volatility stocks and selecting only low-volatility stocks in an effort to deliver attractive risk-adjusted returns relative to the benchmark.

We offer four managed volatility funds:

• SEI U.S. Managed Volatility Fund (SUSYX)
• SEI Global Managed Volatility Fund (SGLYX)
• Tax- Managed Managed Volatility Fund (STVYX)
• Tax-Managed International Managed Volatility Fund (SIMYX)

Why invest in managed volatility funds?

We are a pioneer in the managed volatility space—we launched managed volatility strategies more than 17 years ago. These funds have shown that you may not have to sacrifice returns to reduce portfolio volatility. We are well-positioned to help investors implement such a strategy, either on a standalone basis, or as part of a diversified portfolio.

Fund prospectus and reports

A portfolio of stocks with lower price volatility than the broad market can offer valuable benefits:

• For your client, it provides a simplistic approach to reducing volatility, when coupled with a custom risk profile aligned to their tolerance.
• This asset class provides a core equity holding that anchors the portfolio, and lowers the correlation with traditional investment strategies.
• Advisors have an opportunity to differentiate their advice by aligning equity exposure with a client’s risk capacity.
• Access to equity market exposure can give you potential improvements to portfolio efficiency, but with less overall risk.

How does managed volatility work?

Traditionally, fixed income is used for risk mitigation alone. Managed volatility strategies seek to accomplish this through:

• Creating equity diversification, deployable in both short- and long-term goals.
• Avoiding high-volatility stocks in favor of low-volatility stocks with the goal of delivering attractive investment performance while helping to manage downside risk.
• Putting our focus directly on risk — each of our managed-volatility offerings has a volatility-reduction target compared to its benchmark.

A modest increase in risk can lead to an outsized gain in return, allowing the managed volatility portfolio to produce a higher Sharpe Ratio over time.

Does not represent actual performance of a strategy or fund.

A growing investment strategy

The growing adoption of low-volatility strategies coincides with investors’ demands for investments with the potential for lower risk without sacrificing significant return opportunities.

Important Information

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts.

For those SEI Funds which employ the “manager of managers” structure, SEI Investments Management Corporation (SIMC) has ultimate responsibility for the investment performance of the Funds due to its responsibility to oversee the sub-advisers and recommend their hiring, termination and replacement. SIMC is the adviser to the SEI Funds, which are distributed by SEI Investments Distribution Co. (SIDCO). SIMC and SIDCO are wholly owned subsidiaries of SEI Investments Company.

To determine if the Funds are an appropriate investment for you, carefully consider the investment objectives, risk factors and charges and expenses before investing. This and other information can be found in the Funds’ full and summary prospectuses, which can be obtained by calling 1-800-DIAL-SEI. Read them carefully before investing.

There are risks involved with investing, including loss of principal. Diversification may not protect against market risk. There is no assurance the objectives discussed will be met. No investment strategy, including diversification, can protect against market risk or loss.

International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Investments in smaller companies typically exhibit higher volatility. Real estate and REIT investments are subject to changes in economic conditions, credit risk and interest rate fluctuations. The Global Managed Volatility Fund may invest in derivatives, which are often more volatile than other investments and may magnify the Fund’s gains or losses.