LVAM partners Lighthouse for launch

LV= Asset Management has launched four risk-rated multi-manager portfolios and partnered with IFA company Lighthouse Group to distribute them.

The four Oeic subfunds will form part of Lighthouse Group's LighthouseCapital initiative, but will be available to external advisers and clients.

LVAM has entitled the vehicles LV= Managed Portfolio 4, 5, 6 and 7. The subfunds target each of the scores between four and seven inclusive on Distribution Technology's Dynamic Planner risk-profiling tool.

Dynamic Planner assigns volatility targets and asset allocation, but manager Tom Caddick can over or underweight asset classes to a limited extent depending on his tactics.

There are 10 possible scores in total, but, according to Mr Caddick, roughly 80 per cent of clients fall in the four-to-seven category.

"We run the portfolios within the risk profiles, but with some enhancements to allow us to take some risk off the table when the time is right," he said. "There's flexibility to overweight riskier asset classes, but there's far less flexibility than there is to reduce them. What we don't want to see is risk category four merging into risk category five."

Depending on their risk profile, the vehicles can hold 27-50 per cent in UK equities, 3-8 per cent in European equities, 3-5 per cent in Japanese equities, 0-10 per cent in emerging market equities, 0-7 per cent in Asia Pacific equities, 8-38 per cent in fixed interest and 2-19 per cent in commercial property. Each will have 10 per cent in North American equities.

The portfolios can go 40 per cent overweight lower-risk components, which are currently fixed interest and cash, but will include commercial property under normal conditions. Portfolio 4 can underweight lower-risk components by 10 per cent, Portfolio 5 by 20 per cent, Portfolio 6 by 30 per cent and Portfolio 7 by 40 per cent.

The portfolios can underweight high-risk components - currently equities and property - by 40 per cent, but can also have a 10 per cent overweight position.

Mr Caddick said the funds would go into the IMA's Unclassified sector. He said they were unsuitable for the managed peer groups because of their varying allocations.

The initial charge on the funds will be 5 per cent, while the AMC will be 1 per cent. The TER will be 1.8 per cent. Trail commission will be 0.5 per cent, with initial commission on negotiation. The minimum investment will be £1000.