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Insight beats cash with low volatility fund

Insight’s multi-asset diversified target return fund has marked its second anniversary with performance figures showing it has delivered a 16.1 per cent return since launch.

The company says the fund has outperformed cash by 8.1 per cent over the last two years while its annualised volatility of 3.5 per cent is lower than Government bonds.

Insight says the target return of cash plus 4 per cent has outperformed averages for the Investment Management Association’s active managed, balanced managed, cautious managed, UK all companies and global growth sectors over most five-year timeframes within the last 25 years.

Unlike most funds in the cautious managed sector, the diversified target return fund has not relied heavily on equities. Compared with the sector average of 52 per cent equities, its equity content is 25 per cent.

The portfolio has recently been shifted towards market-neutral and long/short investment strategies across the asset classes because the managers believe this will position the fund for the latter stages of the bull market,

Co-head of multi-manager Patrick Armstrong says future themes for the fund include agricultural commodities, water and the environment.

He expects agricultural commodities such as wheat and sugar, which have been lagging hard commodities, to do well this year as a result of changing demographics and the emerging middle classes in the Bric countries.

Companies involved in environmental technologies and services such as sustainable energy and waste management are also expected to grow as governments and industries address the problems.

Armstrong says: “We have an emphasis on risk control and the fund has done well on the risk side. Performance has been in line with where we want to be. The fund has low volatility. We view it as a success and will continue what we have been doing.”

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