Barings fund aims for equity-like returns with 70% of the volatility

14 July 2011 | By Joanne Ellul

Barings is aiming for a lower-volatility investment option with the launch of a dynamic emerging markets multi-asset fund.

The fund, launched on June 30, is managed by head of the multi-asset team Percival Stanion and co-manager Toby Nangle.

Stanion says: “We have a strong belief that emerging markets offer some of the biggest potential investment returns. We also have almost a decade of experience running dynamic asset allocation products. The fund will appeal to long-term investors seeking a lower volatility way of investing in these high-growth markets.”

Co-manager Nangle says the fund is aiming for “equity-like returns with 70 per cent of the volatility”.

He believes they can achieve this through active asset allocation. He says: “With retail investors, there is a sensitivity to volatility, which is more regulatory than market-driven. This is why we decided there is demand for this product.”

The parameters are quite flexible. It is allowed to invest up to 65 per cent in equities, 30 per cent in commodities, 80 per cent in bonds and 25 per cent in cash.

The fund is currently invested 32 per cent in equities, 60 per cent in bonds, 6.5 per cent in gold and the rest in cash. There is also the flexibility to go up to 30 per cent in developed markets.

Nangle says: “This flexibility means that if we see a catastrophe, we are able to become extremely defensive, which is important to investors.”

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