The funds complement the existing balanced and cautious funds by providing options for investors with a higher and lower risk tolerance. The defensive fund has the lowest risk profile in the Apollo range, targeting volatility of 2 to 4 per cent a year with returns of 2 per cent above cash. The company estimates that it sits between risk profiles two and three based on the usual risk classifications of one to 10. The adventurous fund sits at the opposite end of the scale, targeting volatility of 9 to 12 per cent a year with a risk category of seven.
Apollo believes it is important to set volatility targets for each fund to enable advisers to match the portfolios to their client’s risk profile and compare them with other funds. It believes the restructuring of the IMA managed sector classifications is unhelpful in determining client suitability and has put all its funds in the IMA unclassified sector.
Apollo was founded in 2008 by former Miton managers Tom McGrath and Steve Brann, and Chartwell founder Craig Wetton. McGrath and Brann launched Miton’s first multi-asset fund, arcturus, in 2005 and they believe the best way to grow and preserve wealth is to take a true multi-asset approach. Apollo’s view is that because no single asset class performs well all the time, a portfolio needs to be spread across different asset classes to smooth out volatility.
Apollo says each asset classes has its own characteristics such as average return, volatility and optimum point in the economic cycle, and believes there is no point in paying lip service to the multi-asset strategy by investing mainly in equities and bonds with the odd token alternative. It is proud of its willingness to hold unusual funds in the pursuit of genuine diversification, but some investors may prefer familiar names.