Investment

Capital inflow with new corona! What is a “risk control investment trust”?

Since the pandemic declaration by the World Health Organization [WHO] for the spread of the new coronavirus, the world stock market has suffered an invisible slump.

Because anything that sells is being "cashed", diversification has no effect and all asset prices are falling.

Under such circumstances, investment funds are flowing into risk-controlled investment trusts.

◆ What is a risk control investment trust?
A risk-controlled investment trust is a type of "balanced investment trust" in which diversified investments are made in domestic and overseas stocks and bonds, REITs [real estate investment trusts], and so on.

A general balance-type investment trust reviews the asset allocation ratio when the initially determined asset allocation ratio [basic asset allocation ratio] changes significantly, or at regular intervals, etc. This is an investment trust that changes asset allocation ratios flexibly according to market conditions.

The purpose of investment in risk-controlled investment trusts is to keep fluctuations in NAV within a certain range.

In the downturn phase of the stock market, we lower the asset allocation ratio of stocks, increase the rate of currency hedging during the yen appreciation phase, or use equity futures and bond futures to reduce risk. .

Risk-controlled investment trusts are effective in volatile market conditions, but it is said that it is difficult to expect a large increase in prices when market prices are steadily rising compared to general investment trusts.

◆ Typical risk control investment trust
Here are some typical risk-controlled mutual funds.

◇ 1. “Tokio Marine, Yen Assets and Balance Fund” managed by Tokio Marine Asset Management
The investment trust has a “monthly settlement type” and a “annual settlement type”, and when combined, the inflow of funds exceeded 300 billion yen in the year of 2019.

The investment target does not include overseas assets and is managed by Japanese stocks, bonds and REITs. The monthly rise and fall rate of the investment trust in February 2020 was -2.35% for both the monthly distribution type and the annual settlement type.

The Fund's basic asset allocation ratio is 70% for Japanese bonds, 15% for Japanese equities, and 15% for REITs. The investment is managed with the goal of reducing the risk of fluctuations in the base value to about 3% per year.

If the risk of fluctuations in the base price increases, the asset allocation ratio between stocks and REITs will be reduced, and the reduced portion will be invested in short-term financial assets.

◇ 2. “Investment sommelier” managed by Asset Management One
The Investment Trust is an investment trust managed in eight asset classes, including domestic and overseas stocks, bonds, and REITs.

The investment trust is managed with the aim of achieving a stable increase in NAV, while reducing the risk of NAV fluctuations to about 4% per year. The monthly rise and fall rate in February 2020 was -0.69%.

The feature of the investment trust is that the allocation ratios of the eight asset classes are scrutinized daily and asset allocations are changed quickly.

In situations where the risk is determined to be increased by indicators such as the US stock volatility index such as the VIX index, the allocation ratio of risky asset classes such as stocks and REITs can be reduced or eliminated.

◇ 3. “Man AHL Smart Leverage Strategic Fund” managed by Daiwa Investment Trust
The three types of investment trusts are somewhat different, but are attracting attention as investment trusts that are managed 24 hours a day with state-of-the-art system operations.

The Investment Trust invests in stock index futures and bond futures around the world and builds and manages positions using its unique quantitative model. The monthly rise and fall rate in February 2020 was -2.22%.

We will continue to efficiently accumulate returns while maintaining a risk level of about 10%, which is suitable for long-term investment such as investment trusts and pensions. As is said to be a thorough 24-hour management, price fluctuations of US stock futures and US bond futures are monitored every 10 minutes.

The monthly rise and fall rate of the TOPIX [TSE stock index] in February 2020 was -9.67%. It can be seen that the risks of all the mutual funds are significantly lower than those of TOPIX.

I shouldn't judge it in just one month, but it seems that risk control is in place. If you are not ready to invest, you may consider paying attention to risk-controlled investment trusts.

Sentence = Yasuhiko Fukano [money guide]
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