Mellon Capital's New Strategic Beta Solution Provides Cost-Effective, Transparent, Rules-Based Approach Designed to Offer Improved Market Exposure
NEW YORK, Sept. 15, 2014 /PRNewswire/ -- The Dreyfus Corporation, (Dreyfus), a BNY Mellon company, announced today that it has launched three new mutual funds that seek to improve market exposure by pursuing consistent benchmark outperformance and downside protection potential relative to traditional market-weighted index products.
Mellon Capital's proprietary systematic investment approach selects and weights stocks by economic size as well as quality and growth of earnings to focus on companies with more attractive valuations. By combining these complementary performance factors into a single transparent investment process, the new mutual funds look to overcome some of the potential pitfalls Mellon Capital believes are inherent in traditional cap weighted approaches and single market factor strategies. The three "Dreyfus Strategic Beta" funds are:
"The addition of Strategic Beta portfolios from Dreyfus creates a suite of innovative offerings that provide investors with alternative means of gaining market class exposure that can complement passive and active approaches," said Curtis Arledge, Chief Executive Officer of BNY Mellon Investment Management. "Successful active equity managers have been exploiting these inefficiencies for decades. A smart beta approach can provide an alternative option for investors who appreciate the rules-based, transparent nature of passive products such as index funds but believe that there are limitations to capitalization-weighted index strategies," Arledge continued.
Dreyfus is the funds' investment adviser and Mellon Capital Management Corporation, an affiliate of Dreyfus, is the funds' sub-adviser.
"Mellon Capital's strategic beta approach is a fundamentally weighted, quality focused strategy that seeks to deliver consistent outperformance versus its benchmark by focusing on market inefficiencies," said Warren Chiang, CFA, and one of the lead portfolio managers for these three funds. Mr. Chiang is Head of Active Equity Strategies for Mellon Capital and an 18-year veteran of the firm.
By combining what Mellon Capital believes are complementary exposures into one portfolio, the Strategic Beta funds seek to improve risk-adjusted performance relative to each fund's respective benchmark. The funds' portfolio holdings are weighted by economic size, as well as quality and growth of earnings. Mellon Capital de-emphasizes the respective benchmark's most expensive and lowest quality stocks. Risk is managed by diversifying across companies and industries, seeking to limit the potential adverse impact from any one stock or industry. The fund portfolios are rebalanced semi-annually.
"Single-factor smart beta approaches may result in extended periods of underperformance or increased risk," Chiang continued. "By combining complementary factor exposures into one approach, the Dreyfus Strategic Beta portfolios can potentially enhance risk-adjusted performance, seeking to provide a smoother stream of performance results. Our 30-year history in managing both factor-based active strategies and cap-weighted passive strategies provides Mellon Capital with a unique perspective in managing strategic beta portfolios."
Asset allocation and diversification cannot ensure a profit or protect against loss of principal.
Equity funds are subject generally to market, market sector, market liquidity, issuer, and investment style risks, among other factors, to varying degrees.
Investing internationally involves special risks, including changes in currency exchange rates, political, economic and social instability, a lack of comprehensive company information, differing auditing and legal standards and less market liquidity. These risks are generally greater with emerging market countries than with more economically and politically established foreign countries.
The use of derivative instruments, such as options, futures and options on futures, forward contracts, swaps, options on swaps, and other credit derivatives, involves risks different from, or possibly greater than, the risks associated with investing directly in the underlying assets. A small investment in derivatives could have a potentially large impact on the fund's performance.
For each Fund, there can be no guarantee that any particular level of return, or the fund's investment objective, will be achieved, or that Mellon Capital's investment strategy will succeed
Investors should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. To obtain a prospectus, or a summary prospectus, if available, that contains this and other information about the fund, investors should contact their financial advisors or visit Dreyfus.com. Read the prospectus carefully before investing.
Notes to Editors:
The Dreyfus Corporation, established in 1951 and headquartered in New York City, is one of the nation's leading asset management and distribution companies currently managing more than $270 billion in mutual funds and other cash management vehicles.
Founded in 1983 by innovators in the investment management field, Mellon Capital Management Corporation applies a disciplined and analytical approach to global investment management strategies. As of June 30, 2014, the firm had $379.9 billion in assets under management, including assets managed by dual officers of Mellon Capital Management Corporation, The Bank of New York Mellon and The Dreyfus Corporation, and $4.6 billion in overlay strategies. Additional information about Mellon Capital is available at www.mcm.com. It is a wholly owned subsidiary of The Bank of New York Mellon, one of the world's largest asset managers.
BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, with $1.6 trillion in assets under management. It encompasses BNY Mellon's affiliated investment management firms, wealth management services and global distribution companies. More information can be found at www.bnymellon.com.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of June 30, 2014, BNY Mellon had $28.5 trillion in assets under custody and/or administration, and $1.6 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more at www.bnymellon.com, or follow us on Twitter @BNYMellon.
All information source BNY Mellon as of June 30, 2014. This press release is qualified for issuance in the US only and is for information purposes only. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized. This press release is issued by BNY Mellon Investment Management to members of the financial press and media and the information contained herein should not be construed as investment advice. Past performance is not a guide to future performance. A BNY Mellon Company.
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SOURCE BNY Mellon; The Dreyfus Corporation