Bank of America today (10 October) unveiled the Newton Adaptive Risk Overlay Index (NIMARO index), which aims to provide investors with a diversifying strategy to hedge tail risks and reduce portfolio volatility.
The index will be managed by Newton Investment Management, the specialist multi-asset and equity manager, part of BNY Investments.
Bank of America, acting as index administrator, will provide the transparent and systematic hedging building blocks for the index. Acting as index adviser, Newton’s multi asset team will manage the strategy, utilizing the firm’s proprietary hedging framework and multi-asset pedigree dating back more than three decades.
The NIMARO index seeks to provide a ‘best of both worlds’ hedging solution and leverages Bank of America’s leading Quantitative Investment Strategies implementations and execution capabilities, alongside Newton’s longstanding expertise in tail risk hedging and active management.
Narvir Brar, head of UK EQD Sales at Bank of America, said: “During times of high market volatility, investors are continuously seeking diversification to protect their portfolios. The NIMARO index offers investors access to innovative developments in tail risk hedging, and we are delighted to partner with Newton to utilise their three decades of experience in this area. This is combined with Bank of America’s world-class operational infrastructure and IP.”
Mitesh Sheth, CIO of Multi-Asset at Newton, added: “The NIMARO index is designed to offer an effective risk management and portfolio construction solution for investors. Delivering the strategy through an index allows for a range of implementation choices, giving investors flexibility to achieve their investment goals and objectives.”
