Not All ‘Low Volatility’ Funds Equal Says INTECH CEO

Low volatility funds have been all the rage in the past year after the VIX, or so-called 'fear index', spiked to 41 last August and up to 29 in February before settling back to the mid-teens. Adrian Banner, CEO of Janus (JNS) subsidiary INTECH, said his math-based funds are trying to balance both risk and reward when volatility strikes. 'We are not just trying to minimize volatility like a number of the other funds are trying to do,' said Banner. 'We are also seeking excess returns above the market and managing through many different types of volatility environments that the market can through at you.' Furthermore, Banner said his firm's computer models look at more than just the VIX, now at 17, to generate alpha, or returns above the market. He said they factor in volatility over different time scales and on an individual stock basis, as well as the correlations between stocks.