Equity volatility, as an asset class, has the potential to either harvest the risk premium or to mitigate risk and extract value from changes in risk perception, rather than exposing investors to simple market direction. While investors bear a risk of capital loss associated with active volatility investing, we believe integrating actively managed equity volatility within a global tactical asset allocation has the potential to provide diversification and can help investors face an unfamiliar and winding road ahead.
Sam Richmond-Brown is executive vice president and head of Client Portfolio Management of Natixis Asset Management U.S., and a member of Seeyond, a global investment unit of the Natixis Asset Management organization.
Frédéric Babu is managing director and chief investment officer of Natixis Asset Management U.S. LLC, and a senior portfolio manager at Seeyond, a global investment unit of the Natixis Asset Management organization.