The fund pays income quarterly and hedges exposure to overseas currencies back into sterling to reduce exchange rate risk. It diversifies globally as well as across and within asset classes. Asset classes are accessed through other investment funds, exchange-traded funds and Reits, while UK index-linked gilts are held directly to protect against inflation. The fund can also use derivatives to enhance income.
Fund manager David Buckle has over 15 years investment experience and is part of the UBS global investment solutions team, which has been running multi-asset portfolios for over 27 years. This is the team’s first retail fund.
UBS says the aim of multi-asset investing is to reduce the potential impact of negative performance from each asset class over times and reduce the risks of investing in a single market.
The company says the recent financial crisis has increased demand for this type of fund, which reduces risk through diversification, and created attractive investment opportunities across equities, corporate bonds, property and high yield debt. It believes investors are looking for more stable income sources and alternatives to savings account because interest rates have fallen to historic lows.
The fund may appeal to investors and their advisers who are looking for an income fund which does not rely only on one source of income and who may be concerned about inflation in the future, particularly when quantitative easing ends.
JPMorgan Asset Management’s recently launched multi-asset income fund may provide competition, along with more established funds from Premier and Insight. However, the UBS fund may be a welcome addition to the multi-asset space, where growth funds are more common.