Aquila Capital launches risk parity fund targeting 17% volatility

volcanoHamburg-based alternative fund manager Aquila Capital has launched a risk parity fund that targets volatility of 17%, with a high potential return.

The firm already has a risk parity fund that aims for a volatility of 7% that has returned 4.21%so far this year, and a fund targeting 12% volatility that has returned 8.09% so far in 2012.

Aquila's risk parity funds aim to achieve an equal balancing of risk within their portfolio by employing a very large weighting to low-risk assets, namely government bonds and interest rate futures, so that the risk contribution of these assets is the same as the risk contribution of more volatile equities and commodities.

When interviewed for Funds Europe in May, Harold Heuschmidt, head manager of Aquila's risk parity funds, explained that to achieve a high enough weighting to low-risk assets, the funds use considerable amounts of leverage.

The Risk Parity 17 Fund is aimed at sophisticated investors with a minimum investment of €100,000.

©2012 Funds Europe