Multi-managerApr 27 2016

Flexible approach pays off for Aviva fund’s investors

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Flexible approach pays off for Aviva fund’s investors

An adaptable approach to asset allocation has generated healthy returns for the Aviva Investors Multi-Manager Flexible Fund.

The £62.3m fund, which aims for long-term growth, has delivered a return of 23.2 per cent over three years against the IA Flexible Investment Sector of 14.7 per cent, FE figures reveal.

Investments in developed markets, including the US, Europe and Japan, have taken up more than two thirds of the portfolio, with the rest of the allocation tapping into other regions, including an 8 per cent exposure to emerging markets. The fund’s minimum investment is £1,000 and the ongoing charge is 1.5 per cent.

By comparison, the Lomdard Odier All Roads Multi-Asset fund has lagged behind the flexible sector, having lost 2.8 per cent over three years against the 14.7 per cent peer group average.

The portfolio leans heavily towards equities, with exposure to various pockets of investments in the UK, US, Asia and Europe. Its initial minimum is £1,000 and the ongoing charge is 0.7 per cent.

Aviva Investors Multi-Manager Flexible Lomdard Odier All Roads Multi-Asset
1. Wellington Management US Research Equity Portfolio Class A 16.1%1. T-Note 10yr Future 12%
2. Aviva MOM INTECH (US Equity) 15.9%2. Gilt Future 8.8%
3. Invesco Perpetual European Equity Income 10.5%3. Euro-BTP Future 7.7%
4. BlackRock European Dynamic Class FD 10.4%4. Euro-Oat Future 7.2%
5. Aviva Investors Multi-Strategy Target Return 8%5. S&P 500 E-Mini Future 5.1%

Adviser view

Ben Willis, head of research at Bristol-based Whitechurch Financial Consultants, said: “The Aviva fund has performed well on a risk-adjusted basis, and has outperformed the sector average, but has taken on more risk to achieve this.

“The fund uses best-of-breed actively managed funds across asset classes and regions. Asset allocation and fund selection looks to have been pretty good over the years. However, the fund’s active approach and relatively small size means the OCF [operating cash flow] is well north of 1 per cent.

“If you were to purely compare the Lombard fund’s performance against the sector average, you wouldn’t invest, as it has lagged it over the years.

“However, this does not impart the full picture, as the fund has delivered just over half the returns of the sector average, but with less than half the volatility.

“This is what the fund aims to do: provide measured risk adjusted returns. It also achieves this via passive and smart beta funds, which keeps the OCF keen at roughly 0.7 per cent.”

katherine.denham@ft.com