The Nasdaq OMX Group Inc. and DWS Investments, the U.S. retail unit of Deutsche Bank’s global asset management division, have launched a new benchmark designed to provide exposure to the Nasdaq-100 Index in a risk-controlled manner, the firms announced Thursday, August 26.
According to a statement, the DWS Nasdaq-100 Volatility Target Index (VOLNDX) provides variable exposure to the Nasdaq-100 Index, using a volatility control mechanism designed to limit risk by dynamically adjusting exposure between the Nasdaq-100 and a cash investment. As the volatility of the Nasdaq-100 increases, VOLNDX decreases exposure to the index. As volatility decreases, exposure to the Nasdaq-100 increases, potentially becoming leveraged.
“Recent market events combined with changing demographics have altered the investment landscape,” Chris Warren, managing director and head of structured products in the Americas at DWS Investments, said in the statement. “Consequently, investment objectives are more complex than just going long the market–investing in a risk-controlled manner is critical given an increased focus upon wealth preservation.”