Building blocks from Russell
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Multi-manager group Russell Investments has created four funds to help IFAs with asset allocation and portfolio construction. These follow the launch of Russell’s helping advisers website, which provides IFAs with online resources and tools, including help with asset allocation and understanding the markets.
The UK growth assets fund invests mainly in equities and will be managed initially by Investec, FOUR Capital and BlackRock. Each manager can pick stocks from any company or sector and is not limited to benchmark weights.
The international growth assets fund also invests mainly in equities and will be managed initially by Harris Associates, Marsico Capital Management, McKinley Capital Management, MFS Investments and Arrowstreet Capital.
The defensive assets fund invests mainly in Russell’s multi-manager cash and bond funds, but could also include funds that have lower volatility, such as its absolute return equity fund. As a portfolio of multi-manager funds, it provides exposure to 20 management groups/
The real assets fund invests in asset classes that are directly or indirectly linked to physical assets such as commodities, property companies and infrastructure. Its underlying Russell funds provide exposure to nine management groups and it also invests in a commodities exchange traded fund.
Advisers can implement different asset allocations to suit a range of risk profiles using the four new funds as building blocks. They can use Russell’s model portfolios or make their own asset allocation decisions.
Russell’s approach to asset allocation, fund research and portfolio construction may be in tune with the times as IFAs wrestle with the challenges thrown up by the Retail Distribution Review proposals.
Until now, Russell’s multi-manager expertise was available to the UK retail market only through Scottish Widows, so its presence in its own right could appeal to IFAs. Its recent appointment of three regional directors to its adviser support team indicates a commitment to IFAs but it may face competition from companies such as Skandia.
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