Royal London’s Multi Asset Strategies is the latest fund to be launched for Trevor Greetham and his eight-strong multi-asset team.
It targets annualised total returns of cash, defined as the Sterling Overnight Index Average, plus 4 per cent over five-year rolling periods – aiming to capture market upside, while limiting downside risk for investors. So for all intents and purposes, it is a targeted absolute return product, but currently residing in the Investment Association’s Unclassified sector.
Mr Greetham has, for many years now, used an ‘investment clock’ as the mainstay of his process. The investment clock looks at where the world is in terms of the economic, business and inflationary cycle and details which asset classes usually do best during different phases.
This new fund will follow the same process, using two distinct types of multi-asset strategy to achieve its targets: risk premium strategies to generate returns from positive market trends, while reducing exposure to riskier assets during periods of turbulence, and tactical asset allocation strategies to exploit opportunities.
Like the other multi-asset funds run by the team, it will invest mainly in Royal London funds – both active and passive – and some exchange-traded funds, while the ongoing charges figure is reasonably low at 0.55 per cent.
It has been launched at a time when many are questioning if the decade-long bull market we have enjoyed is finally reaching a turning point – and investors are perhaps looking to make sure their portfolios have a level of resilience should things take a turn for the worse.
However, given the team already manage a range of six Global Multi Asset Portfolios – ranging from ‘defensive’ and ‘cautious’ through to ‘adventurous’ and ‘dynamic’ – I am not sure this fund, with a slightly different brand, is altogether necessary.
Performance of the existing range has been a bit disappointing approaching their third anniversary: five of the six are third or fourth quartile, with the exception being the adventurous fund, which is first quartile since launch, according to total return data from FE Analytics, for March 14 2016 to February 6 2019. Shorter-term performance has been slightly more encouraging.
Mr Greetham’s process is an easy one to explain to clients and he has stuck to it over many years, so it is familiar to many and his followers may well like the sound of this new addition.
But there are already a number of more established versions from which to choose, so whether it gains traction remains to be seen.
Chris Salih is a multi-asset funds researcher at FundCalibre