Tilney to launch smart beta range

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Tilney to launch smart beta range

Discretionary fund manager Tilney for Intermediaries plans to launch a smart beta multi-asset fund range in early 2016, subject to FCA approval.

Tilney said it will launch a range of “risk-graded, low cost multi-asset funds”. These funds will actively allocate to asset classes but use passive-like smart beta strategies to build up the exposure.

So-called smart beta products tend to mimic passive strategies but with some form of amendment to the traditional market cap index-method, such as allocating equally to each stock.

Miles Robinson, head of Tilney for Intermediaries, said the proposed launch was a response to growing demand from advisers for lower-cost investments without the “inherent limitations” of using purely passive strategies.

Mr Robinson added: “There’s a clear increase in demand from advisers for lower-cost investment solutions, but many advisers also recognise there are significant drawbacks with traditional passive products which leave their clients assets fully exposed to the risks of valuation bubbles and also losses in overall market downturns.

“We plan to combine the same discipline and successful approach to active asset allocation which has proven successful with the existing Multi-Asset Portfolio fund range with investment selection that makes use of the next generation of passive investment strategies.”

Tilney said its new strategies could include weighting exposure on fundamental factors such as book value, dividends, earnings, cash flow and balance sheet strength. Further details will be revealed in the new year.