View more on these topics

Aviva partners with Morningstar in portfolio launch

Aviva-signage-building-2013-700.jpg

Aviva has launched a range of governed portfolio, to be managed by Morningstar, with costs capped at 0.5 per cent.

Five portfolios cover the risk spectrum from cautious, which has a 16.5 per cent exposure to BlackRock Cash, to adventurous, which has its highest exposure to the L&G UK 100 Index (24.5 per cent).

The funds currently have exposure to a selection of 17 funds, covering fixed income, absolute return, and equity across the UK, Europe, North America, emerging markets, Asia and Japan. Alongside the BlackRock Cash fund, only four other funds in the portfolios are actively managed.

Morningstar CIO Dan Kemp says: “Cost was very much a starting point.”

“How we’ve done that is to use primarily passive funds to also keep our own costs very low and finally just using a small number of active funds, where a passive fund isn’t available or where you have some managers who are great alpha generators and we want them to be included in the offering.”

Exposure to actively-managed funds ranges from 12 per cent to 16 per cent.

Kemp says small-caps is an under-researched area where they believe asset managers can add value, with River and Mercantile UK Equity Smaller Companies fund included in the moderate, moderately adventurous and adventurous portfolios.

All funds have exposure to Henderson UK Absolute Return and BlackRock European Absolute Alpha, where no passive alternatives exist, ranging from 3.5 to 4.5 per cent.

The final actively managed fund is the Kames High Yield Bond fund, with each fund having between 3 to 5 per cent exposure.

The portfolios can include property funds, but none have any exposure currently due to uncertainty around access and liquidity in the aftermath of Brexit, says Kemp.

“Comments from the FCA over the last few weeks suggest that structural changes may be demanded of property funds in order to address the liquidity mismatch.

“Until we know what those changes might be, it is impossible to confirm whether open-ended property funds will remain an investible asset for portfolio managers operating on platforms.”

Tim Orton, chief executive of Aviva Platform says the portfolios were a response to adviser demand for an affordable solution. “From my perspective, it’s around providing choice. We’ll continue to see a number of advisers and their clients getting value from active management, but there is a segment where cost is very important and this new proposition meets that need.”

Recommended

Aviva-signage-building-2013-700.jpg
7

Aviva faces court claim over unpaid commission

An adviser has issued a County Court Summons against Aviva over commission from a Friends Life personal pension he claims is owed to him. Barrett Financial Solutions managing director Kim Barrett is taking the provider to the small claims court because he is owed £415 in commission. He is also claiming for time spent trying […]

1

Andy Barton: Why Aviva will be offering advice, again

This is a logical step for us. We have found that since April last year, our customers without an adviser definitely need to seek advice somewhere. We know a lot of these customers need advice and they expect Aviva to help. Confusion over the difference between guidance and advice was not a cause for us. […]

Retirement - thumbnail

Pension freedoms: stop the scams

At the beginning of 2015, we highlighted that the new pension freedoms that come fully online on 6 April also represent a very attractive opportunity for the criminal fraternity to scam savers out of some, or all, of their accumulated retirement savings.

Newsletter

News and expert analysis straight to your inbox

Sign up

Leave a comment