View more on these topics

RUTM unveils two multi-asset portfolios

Rathbone Unit Trust Management has unveiled two multi-asset funds of funds that will not contain any Rathbone funds.

The firm believes that focusing on externally managed funds will reduce conflicts of interest that could otherwise arise when constructing the total return and strategic growth portfolios.

The total return portfolio is designed for risk-averse investors and aims to outperform the six-month Libor by 2 per cent, with less volatility than equities. The strategic growth portfolio aims to outperform the UK Consumer Price Index inflation rate by 5 per cent, again with less volatility than equities but with higher volatility than the total return portfolio.

The funds will be unconstrained by index benchmarks but will not be invested in every asset class at all times. Asset allocation is driven by risk and correlation rather than geography and the best funds within each category will be selected.

Fund manager David Coombs will take a top-down approach to decide how much risk is appropriate for each portfolio. Coombs joined RUTM in 2007 after almost 20 years at Barings. He established its absolute return investment process and managed Barings multi-asset funds.

In the new fund, assets are grouped according to three categories –  liquidity, beta and alternatives. Liquidity refers to assets that do not contain much credit risk, are not highly volatile and can be easily disposed of to meet redemptions – for example, government bonds. Beta assets are highly correlated to the economic cycle, such as equities and corporate bonds.

Alternative assets are in theory uncorrelated to the economic cycle. They include more liquid assets such as precious metals on the commodities side, and illiquid assets such as distressed debt strategies.

RUTM says many multi-asset funds are overly concerned with performance relative to the competition. It also believes many products just select the best of breed with little consideration for the alternative asset classes that could attract IFAs to these funds.

However, the funds will sit in the IMA unclassified sector, which could make it difficult for IFAs to compare them with products from firms such as Swip, M&G, Cazenove, Apollo and Premier.

Recommended

Revenue admits drawdown error

HM Revenue & Customs has apologised after incorrectly telling LV= that income-drawdown investors could switch providers or buy an annuity before the age of 55 without facing an unauthorised payment charge. HMRC confirmed last week this is not the case and that these investors would face a 55 per cent tax charge, contradicting earlier email […]

13

PI excess fears for ex-Park Row IFAs

Ex-Park Row advisers fear they may be pursued for professional indemnity excess payments regarding complaints relating to customer files which were not vetted by internal compliance.

Cable pledges it won’t be business as usual for banks

Business secretary Vince Cable has vowed to impose tough reforms on Britain’s biggest banks, stressing that there is “no way of going back to the status quo”. Last weekend, in his first newspaper interview since being appointed business secretary, Cable told the Financial Times that the banks faced being broken up, tougher lending controls and […]

China: growth defence or another debt-fuelled boom?

By Douglas Turnbull, Head of Chinese Equities at Neptune Following recent stimulus efforts from Beijing, Neptune’s Douglas Turnbull examines how the government’s long-term reform agenda can be balanced with supporting growth and addressing structural challenges, and the investment opportunities arising from this.Click here to read more Important information: Investment Risks Neptune funds may have a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment