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Rathbones launches fund and cuts fees in multi-asset reshuffle


Rathbone Unit Trust Management has launched the Rathbone Strategic Income Portfolio to expand its multi-asset range.

The global multi-asset income fund, which is still subject to FCA approval, will be run by David Coombs, head of multi-asset investing at Rathbones.

The fund is aimed at investors that want an income in the current low-yield environment, but will have a focus on liquidity. The fund aims to deliver a yield of 3 per cent, while also having a total return of CPI plus between 3 and 5 per cent over a five to seven year period.

The entire multi-asset range will now also invest directly in large-cap equity, rather than accessing the asset class via funds.

Rathbones will also cut the fees on funds within the multi-asset range from the start of August. The Rathbone Strategic Growth Portfolio, Rathbone Total Return Portfolio and Rathbone Enhanced Growth Portfolio will now use the S-class share, rather than the I-class, which will be scrapped.

As a result, the annual management charge of the multi-asset range will be cut to 0.5 per cent, from 0.75 per cent. Rathbones will also pay the 0.11 per cent administration fees directly, in a further cost-cutting move.

The Rathbone Enhanced Growth Portfolio’s targeted return benchmark will be changed to target more than CPI plus 5 per cent, like the rest of the multi-asset range. Currently the fund aims to deliver 2 per cent more than a composite benchmark of 70 per cent MSCI World Index and 30 per cent MSCI Emerging Markets Index.

Rathbone Unit Trust Management chief executive Mike Webb says the launch of the Strategic Income fund “builds specifically on the success of the Rathbone Strategic Growth Portfolio”.

He says: “It meets the ongoing demand for income in an environment of low economic growth and low interest rates, where many investors are forced to drawdown capital to maintain their lifestyles.”

Coombs adds: “We have designed a portfolio that should deliver a realistic and sustainable income stream within acceptable risk parameters, rather than chasing higher-yielding opportunities that carry a worryingly disproportionate element of risk.”

“Liquidity will be a key factor and form a cornerstone of our thinking, hence investments in government bonds, large-cap equities and short-dated investment grade bonds. We will also have exposure to specialist funds in more illiquid areas which have low duration exposure, typically in closed-ended vehicles.”

The new fund doesn’t have initial charges. Ongoing charges are expected to be 0.84 per cent with a minimum investment of £1,000.



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