TM Darwin founder David Jane says his first multi-asset fund will have uncorrelated asset positions to maintain a low risk.
Jane says the fund is more diversified than many other multi-asset vehicles. He says: “There is a demand now for low-risk, income-producing products. Drawdown is my measure of risk for the fund. The fund will be 35 per cent in bonds and 50 per cent equities. We only hold government bonds, like Australian and US bonds, because these do not correlate with equities. There is 15 per cent in ETFs, with ones in agriculture, gold and oil. We do not use swap-based ETFs.”
He says there is exposure to oil service equities, which do not correlate with oil prices. The fund has a maximum of 60 per cent in equities.
Jane confirmed the firm is also looking at a total return fund at some point, although a launch date has yet to be decided.
Bestinvest senior analyst Ben Seager-Scott says: “Multi-asset managers manage to achieve uncorrelation to a degree in portfolios.
Correlations are not hard and fast, they can change with market conditions.”