The iSTOXX Europe Minimum Variance index is designed to minimize risk by reducing the volatility of the underlying STOXX Europe 600 index. This is achieved by the weighting of index constituents according to their variance/covariance characteristics. Additional constraints are introduced to avoid extreme asset or sector concentrations.
The strategy for the iSTOXX Europe Minimum Variance index is based on Markowitz`s Nobel Prize-winning Modern Portfolio Theory.