Rathbones is to add a higher-risk third multi-asset fund to its range, to be run by investment director David Coombs.
The fund will be a more aggressive, higher-risk offering compared with the group’s existing firm’s multi-asset portfolios. The fund will launch on August 1, with 65 per cent in equities, 15 per cent in alternatives and the rest in cash. Coombs is looking at alternatives such as a CDO equity fund and catastrophe insurance bond fund.
The Rathbones enhanced growth portfolio seeks to generate, on average, 2 per cent above the returns from a combination of 70 per cent MSCI World Index and 30 per cent MSCI emerging markets index over the long term, with a volatility targeted to be 100 per cent of equity volatility. It will target 7 per cent annualised return.
In terms of asset parameters set internally, Coombs says the funds are allowed a maximum of 90 per cent and a minimum of 30 per cent in equities. It will have an average of 55 per cent in equities.
He says: “We have seen demand from clients to move into higher-risk assets. We believe that in 10 years time, the weighting to emerging markets in the MSCI World index will more closely match their share of global GDP than current stockmarket capitalisations. The International Monetary Fund is forecasting that emerging markets share of GDP could be as much as 51 per cent by 2013. This ties in with our forward-looking message.”