Aviva Investors duo overhaul £1bn range

The changes, which include sacking Lazard from a mandate on the range, have included a new focus on reducing the amount that investors pay in total expense ratios (TERs) on the funds.

Mr Aylward said the funds’ TERs had fallen by roughly 5 per cent across the board. On the Cautious fund, the TER has fallen to 1.9 per cent, while it has fallen to 1.98 per cent on Income, 1.99 per cent on Balanced and 2.05 per cent on Adventurous.

“We have been able to do this through concentrating the number of managers in the UK and through the purchasing power of Aviva,” he said.

The duo took control of the funds in October from Close Brothers when Aviva moved to bring the management of its multi-manager franchise in-house, as revealed by Investment Adviser. When they inherited the manager-of-managers funds there were five separate sub-managers running UK equity mandates.

The decision to oust Lazard and reduce the number of UK equity managers came amid a move from excessive diversification, according to Mr Aylward.

“Also, if you look at the correlations and performance through the [market] cycle, relative to the others, the Lazard fund brought the least difference,” he said.

The Lazard mandate will be divided between the remaining four sub-managers – Investec Asset Management’s Alastair Mundy having the largest mandate on the range.

Mr Aylward added that the only alternative asset class held on the range was property when he arrived as investment manager. The duo is now set to split the alternatives basket into four sections – property, commodities, hedge funds/absolute return vehicles and tactical allocation, he said.

The multi-managers have already awarded the commodities mandate to Stuttgart-based Tiberius.