Volatility Control Indices

Volatility refers to the movements or fluctuations of assets. A volatility control index, as the name implies, aims to control such fluctuations to deliver stabilized returns while keeping drawdowns low. By switching between the underlying index or portfolio and a cash-like asset, volatility control is an effective risk management technique widely used in indices, annuities and structured products. For end-investors, they get an index that has steady risk and reduced drawdown potential. For product providers (such as an insurance company or a bank), they are able to have a higher participation in the index due to lower volatility.

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