BMO expands range of 'low cost' actives

BMO expands range of 'low cost' actives

BMO Asset Management has continued its push into the territory traditionally occupied by passive providers with the launch of three 'low cost' active funds.

The multi-asset funds invest exclusively in other funds run by BMO and offer Income, Defensive, and Adventurous mandates.

They complement the three existing funds, which are overseen by Paul Niven, who runs a range of multi-asset funds at the firm, and cover Cautious, Balanced, and Growth mandates.

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All of the funds have a capped annual charge of 0.29 per cent.

BMO’s head of distribution, Rob Thorpe, told FTAdviser last month that the company created its range of Universal Multi-Asset funds as a reaction to the growth of passive investments.

He said advisers are under increasing fee pressure from end clients and as a result are more conscious of the cost of underlying investments.

He said BMO decided it would try to offer a range of active funds with the same cost profile as passive products. 

The existing range of funds have been attracting inflows of £20m a month, with the total assets under management hitting £300m.

Mr Niven said: “The delivery of consistent investment outcomes for our clients relies upon an active approach at each stage of our investment process.

"Our strategic asset allocation is assessed on a quarterly basis to provide a dynamic approach to core allocations.

"Tactical allocation allows for more frequent adjustment of the portfolio to take advantage of market opportunities as they arise."

He added: "We also make use of active stock selection in our equity and fixed income exposure.

"This active approach to both asset allocation and stock selection has provided market leading performance since launch and our six Universal MAP funds give investors clarity on the volatility of their investments, which in this environment is becoming essential.”

Patrick Connolly, head of communications at advice firm Chase De Vere, said: “It is a sensible approach for BMO to complement their range by adding these three new funds.

"To date their existing funds have performed well and these new products similarly benefit from very competitive charges.

"This is achieved by investing predominantly in an underlying range of BMO funds, passive holdings and individual stocks.  

"If this strong performance continues then these funds are likely to be used by an increasing number of advisers.”