Reyl fund managers see volatility continuing for another six to nine months. Geneva-based private bank Reyl has launched an equity fund that aims to outperform through market turmoil by focusing on companies with strong earnings and transparent financials.

"It's still an uncertain environment and it's likely to remain volatile until the first quarter or first half of 2009," Reyl fund manager Thomas de Saint-Seine told Reuters last week.

Some sins in; some sins out

Reyl's investment arm has about $2.2 billion under management. Its five-month-old Europe Low Vol fund accounts for $54 million of that. Since launch last April, it has lost 4.2% compared with a 30% drop for the S&P Stoxx 600 index, with approximately one fifth of the broad market's volatility.

Maxime Botti, a co-manager of the Reyl Europe Low fund along with Saint-Seine and Emmanuel Hauptmann, says the point of the product "is o achieve an absolute performance of about 10 percent with a volatility between 5% and 8%."

Reyl Europe Low fund managers say companies with good visibility on earnings, strong balance sheets and prospects for dividend growth are doing well in this market environment. Among examples they cite are British American Tobacco, Italian power-grid operator Terna and OPAP, a Greek betting company.

With banks, on the other hand, "you have very poor visibility on earnings," says Saint-Seine.

Dominique Reyl, a co-founder of the Geneva-based fund-management firm CFEG, founded Reyl 20 years ago. -FWR

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