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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

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.
Asset ClassClientAdvisorPortfolioManaged Volatility

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.