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Tactica puts its mark on multi-asset

Tactica Fund Management UK

S&W Tactica Balanced Portfolio

Type: Oeic

Aim: Growth by investing in a multi-asset portfolio of global equities, bonds, alternatives, commodities, hedge funds and cash directly and through investment funds

Minimum investment: Lump sum £25,000

Investment split: 57% global equity, 14.5% investment grade fixed income, 15% hedge funds, 5.5% emerging market equity, 4.5% currency, 3% high yield fixed income. 0.5% cash

Isa link: Yes

Pep transfers: Yes

Charges: Initial 5%, annual 1.75%

Commission: Initial 3%, renewal 5%

Tel: 020 7598 5399

This fund is part of a range of three risk-graded Oeics, which invest directly in a range of asset classes and through investment funds.

Hargreaves Lansdown senior analyst Meera Patel observes that multi-asset portfolios are gaining greater attention, particularly as investors look for a more balanced approach in the current volatile environment rather than investing in just one or two assets. She thinks that multi-asset investing can take the headache out of asset allocation and this in turn should free up the time of financial advisers who can concentrate on other aspects of financial planning.

“This portfolio offers diversification through a blend of assets like global equities, fixed income, hedge funds, currency, cash and property. In theory, a blend of different assets should help lower overall volatility over the longer term,” she says.

In Patel’s view, one attraction is that the approach uses risk as a starting point rather than traditional methods which treat risk after the portfolio is constructed. “Tactica looks at risk first and then constructs the portfolio using a variety of asset classes. The risk level of this fund should sit somewhere between a traditional bond fund and a traditional equity fund according to Tactica. What’s more, the advantage of multi asset funds is that they are actively managed portfolios, not static portfolios. The asset allocation will change over time depending on the management’s outlook going forward,” she says.

However, she adds that getting the asset allocation decisions right is crucial and this remains to be seen. This brings Patel onto a further discussion about the potential drawbacks of the Tactica portfolio.

“The fund does not have a track record and even though Tactica has presented a historical back test using various assumptions, it is not real performance. I would like to see a track record and whether or not the underlying managers can prove their mettle,” she says.

The issue of charges also comes in for criticism. “More funds are launching with an annual charge of 1.75 per cent. Personally, I think this is steep. Given that the fund also invests in assets like hedge funds, I expect the total expense ratio to be fairly high. While I feel one should not get too bogged down by charges, particularly when performance is exceptional, there has to be a limit on how much a provider charges, so I would be interested to see what the fund’s TER is,” she says.

Patel points out that the fund also has a high minimum investment of £25,000, unless it is bought through a platform – in which case this may be lower. “For IFAs who don’t use fund platforms, this high minimum is not ideal for less wealthy investors who could find this product useful in their portfolios, but couldn’t access it because they have lower amounts to invest,” she says.

Discussing the main competition Tactica will face, Patel says: “It is difficult to compare exact like for like with these products, but in the main I would see funds like the Midas balanced growth, Miton strategic and the JPM balanced total return funds among some of the competition.”

Summing up Patel says: “As with any new product that comes to the market, in theory the concept sounds great, but in reality we need to see that these funds can deliver what they pledge. It will be interesting to see how this fund gets on and whether it is truly a fund for a variety of market conditions.


Suitability to market: Good
Investment strategy: Good
Charges: Poor
Adviser remuneration: Average

Overall 6/10


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