Aviva launches index arbitrage fund as tracker market grows

The Aviva Investors Index Opportunities Ucits III fund uses a strategy to generate low-volatility returns with close to zero correlation with major asset classes. The fund, led by managers Iyad Farah and Ned Kelly, monitors up to 25 equity indices across the world, each of which rebalances between one and twelve times a year. Aviva says this rebalancing causes passive funds to simultaneously adjust their portfolios, therefore impacting liquidity. The fund aims to exploit these anomalies by adopting long positions in stocks that are due to be included in the index, and short positio...