Aim: Growth by investing in a multi-asset portfolio managed to a growth risk portfolio with target volatility of 15-20%
Minimum investment: A shares Lump sum £500, monthly £50, C shares initial £100,000
Investment split: 30.4% global equities, 19.9% emerging markets equities, 16% commodities, 16.5% real estate, 4% absolute return strategies, 6.6% emerging market bonds, 2.8% treasury bonds, 3.8% corporate bonds
Isa eligible: Yes
Charges: A shares initial 4%, annual 1.5%, C shares annual 0.75%
Commission: A shares initial 3%, renewal 0.5%
Tel: 0800 389 4696
Allianz Global Investors has designed a range of four risk-profiled multi-asset funds, one of which is the Allianz riskmaster growth fund. The aim of the RiskMaster range is to find the right balance between risk and reward for each risk profile. Allianz believes this is important given the difficulties advisers face in the current environment of volatile markets, low interest rates and clients showing an increased sensitivity to risk. The funds combine both strategic and dynamic asset allocation to ensure broad diversification across asset classes, capturing growth potential and keeping risk to a minimum.
Putting the Allianz riskmaster growth fund in to its market context, Chelsea Financial Services head of research Juliet Schooling Latter says: “This is one of four risk-rated multi-asset funds, launched by Allianz Global Investors, that are designed to target specific volatility levels according to a client’s individual risk preferences.
“This fund is the racier of the range with a risk-rating of seven. It has around 30 per cent in global equities, 20 per cent in emerging market equities, 16 per cent commodities, 16 per cent real estate, 4 per cent absolute return and the remainder in bonds. “
Schooling Latter feels the mix of asset classes is decent. “I particularly like the global focus and the fund will have both strategic and dynamic asset allocation in the investment process.
“I also like the fact that the risk ratings have been awarded independently by Distribution Technology. Allianz Global Investors is not taking a snap-shot risk rating, but will have on-going risk management from both its own risklab team, as well as by Distribution Technology.”
Schooling Latter believes Allianz has also underlined the importance it is giving to maintaining consistent risk levels by offering a price promise: if the launch rating is changed by Distribution Technology they will waive the annual management charge for three months, up to 0.75 per cent.
“Allianz Global Investors has a strong and experienced risklab and multi-asset team who have worked together on products for institutional investors for a number of years. Between them, they manage or supervise many billions of pounds of assets,” says Schooling Latter.
She feels that by launching products for retail investors Allianz is tapping into the increased sensitivity to risk that has come as a result of volatile markets and low interest rates, as well as the increasing regulatory burden on IFAs with the coming of RDR.
Turning to the potential drawbacks of the fund, Schooling Latter says: “The underlying investments for the fund will be exchange traded funds, some active funds for absolute return strategies, physical securities – equities including REITs, and bonds, derivatives and cash. Personally I’d like to see a few more actively-managed funds in the mix.”
Discussing products that could compete with Allianz, Schooling Latter says: “Skandia’s spectrum range is very well established in this space and is used widely by advisers. Standard Life Investments, F&C Thames River and Invesco Perpetual also have similar products, while the likes of Threadneedle, Aberdeen and Investec have incorporated risk ratings into their existing products.”
Summing up, Schooling Latter says: “There seems to be a bit of a mad rush to launch this type of product ahead of the RDR deadline. A number of providers have joined the bandwagon, some launching standalone new products while others have added risk ratings to existing funds.
“I think providers need to be careful not to launch inferior ‘me too’ products and only go into this space if they have the right expertise. The intention is that investors should be able to put money into a fund which isn’t going to give them any surprises, but the opposite could be the case if done badly. This type of product can also be more difficult for an investor to understand so they need to be explained properly.”
Schooling Latter adds that it is not helpful that all four funds will be in the IMA Specialist sector, as she thinks it makes it almost impossible to compare them with their peers. “That’s more for the IMA to sort out though if the number of this kind of fund is to increase,” she says.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average