Enhanced Index International Share Fund

Fund overview

For clients seeking a passive style of investment we offer an enhanced index style. The Enhanced Index Share Fund (Enhanced Index Fund) is a wholesale trust designed to create a low risk of underperforming the benchmarked index, aiming to maintain a tracking error of 0.5% per annum. In maintaining this low level of volatility, AMP Capital uses a standard index-based investment approach as well as using return enhancement techniques. These enhancement techniques are generally applied within set stock and sector weighting ranges.

The enhanced index philosophy is designed to add value by:

• Providing exposure to the Australian share market while minimising the risk of underperforming the index
• Delivering an enhanced return using a range of liquidity-driven and traditional value-add techniques
• Offering style diversification when combined with specialist active managers, thus lowering overall portfolio risk

A range of predominantly liquidity-driven techniques are used, such as market-making, participating in floats, placements and sub-underwriting. Because of this, there is the opportunity to enhance or beat the benchmark index return. To achieve these returns enhanced index funds take on slightly higher levels of risk, relative to benchmark, than a pure indexed fund.

Key features

• Provides exposure to the Australian share market while potentially minimising the risk of underperforming the index.
• Use of a range of liquidity-driven and traditional value-add techniques potentially enhancing returns over Benchmark.
• Offers style diversification when combined with specialist active managers, thus lowering overall portfolio risk.
• An experienced, stable and well resourced team.
• Access to the resources of AMP Capital Investors, including the broader Equity Team’s analysts and dealing team, the Investment Strategy and Economics Team and the Corporate Credit Team.

Fund Facts