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INTECH Celebrates 25-Year Anniversary, Generating Alpha, Managing Risk

Stocks in this article: JNS

WEST PALM BEACH, Fla., June 28, 2012 /PRNewswire/ -- INTECH Investment Management LLC (INTECH), a global institutional investment management firm, today announced it has reached the 25-year mark, celebrating a quarter-century of pursuing alpha while managing risk.

"In commemorating this significant milestone in INTECH's history, we want to express our appreciation for the partnership we have with our clients and their consultants and the trust they have placed in us," said Jennifer Young, CFA, Chairman and Chief Executive Officer of INTECH.

INTECH serves its institutional clients through an investment process, based on a mathematical theorem that attempts to capitalize on the random nature of stock-price movements. The theorem was discovered by INTECH founder Dr. Robert Fernholz and published in the paper, "Stochastic Portfolio Theory and Stock Market Equilibrium" in The Journal of Finance in 1982. "The goal of INTECH's investment process is to achieve long-term returns that outperform the benchmark index, while managing risk and trading costs," said Dr. Adrian Banner, INTECH's Chief Investment Officer.

On a practical level, Stochastic Portfolio Theory was first applied at INTECH when the firm launched its flagship strategy, U.S. Enhanced Plus, on July 1, 1987. INTECH uses stock-market volatility as an alpha source, while embedded risk controls in its process are designed to help protect its portfolios on the downside through many different market cycles. "That is the real value we provide to our clients. We offer a consistent and repeatable risk-managed investment process, which, over time, is able to generate alpha," noted Ms. Young.

Evidence that INTECH's investment process is able to achieve this result can be found by looking at the performance of U.S. Enhanced Plus since its inception. The strategy has realized positive relative returns based on all 299 possible monthly inception dates through May 31, 2012 (298, net of fees). Since its inception, the strategy has provided an annualized excess return of 1.50% above its benchmark, the S&P 500 Index, gross of fees (1.05% net of fees) as of May 31, 2012.*

Because all of INTECH's strategies are built on the same "alpha engine," during the past 25 years, INTECH has been able to extend the application of its mathematically driven investment process to include various investment universes (core, growth, value and high yield); geographies (global, EAFE, eurozone) and strategic objectives (relative return and absolute return). INTECH's investment process can also be applied with varying levels of aggressiveness.  

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