Launched this month, the Global Equity Index PutWrite fund follows the US Equity Index PutWrite vehicle that opened in December 2016.
Both strategies are designed to provide equity-like returns yet with lower volatility and stronger downside protection, managed by the options group investment team, which sits within the firm’s quantitative and multi-asset class team.
Derek Devens, managing director, is the fund’s senior portfolio manager, supported by research analysts Rory Ewing and Eric Zhou.
Put options give security owners the right – but not the obligation – to sell an asset at a pre-agreed price by a set date.
Doug Kramer, co-head of quantitative and multi-asset class investments at Neuberger Berman, said: “Many investors know that buying downside protection with put options can be quite expensive in the long run.
“Reducing tail risk, dampening volatility and minimising capital erosion comes with a price.
“Even though put options are expensive in the long run, there will always be demand for them in the short run, as many investors simply cannot stomach short-term volatility.
“We can take a long-term view and take advantage of this.”
Calling the exchange-traded put options market “liquid and deep”, Kramer said taking a long-term view reaped its rewards.
“Collateralised put writing is another way of getting exposure to the equity market, but with less downside and lower volatility – particularly important characteristics for clients looking to preserve capital and meet liabilities or investment goals over the long term.”
