The Ossiam ETF FTSE 100 Minimum Variance uses physical replication to track the performance of the FTSE 100 Minimum Variance TR Index, which is a new index calculated and published by the FTSE Group.
The aim of the index is to deliver the net total return of a selection of blue chips while mitigating risks, with a methodology developed jointly by FTSE and Ossiam.
Ossiam said the London-listed fund was a significant addition to its product range as it gives investors "exposure to a selection of the most liquid UK stocks weighted with the intention to minimise the volatility of the total portfolio".
On average the volatility of the FTSE 100 Minimum Variance TR index is at least 24% lower than the FTSE 100, with a significant reduction in drawdowns, Ossiam said.
The total expense ratio of the fund is 0.45% and it does not undertake securities lending.
Bruno Poulin, CEO of Ossiam, said: "This was an excellent opportunity to start working with FTSE Group, a global leader for index products, in the development of the index methodology underlying the fund.
"In addition this new ETF which uses full replication with no securities lending confirms our commitment to provide solutions adapted to UK clients. In our opinion extra revenues generated by securities lending would not justify the additional layer of risk supported by the fund holders."
