Investments  

BMO targets 'multi-billion' inflows a year for Vanguard rival

BMO targets 'multi-billion' inflows a year for Vanguard rival

The fund range created by BMO Asset Management with the explicit intention of rivalling the Vanguard Life Strategy should be generating many billions of net inflows every year, according to Rob Thorpe, head of intermediary sales at the firm.

BMO launched three actively managed multi-asset funds under the brand name MAP in 2017, and the range has since expanded to nine funds, including three ESG portfolios.

The funds have an annual charge of 0.29 per cent, which Mr Thorpe says means they are competitive against Vanuguard’s multi-asset Life Strategy range of passive funds, which attract inflows globally of about £5bn a year.  

He said: “I would expect our fund range to be getting inflows of pretty close to that level in the years to come.” 

In September 2019, the fund range had assets of £300m and was, according to Mr Thorpe, attracting net new money at a rate of £20m per month. 

He told FTAdviser last week the fund range has grown to £570m in size, but as the first three funds in the range approach the third year anniversary of their launch he expects inflows to increase markedly.

He said: “I know that many advisers and fund buyers won’t look at a fund until it has a three-year track record, some of the systems used to select funds screen out any products that don’t have a three-year record.

"As the first three of the MAP funds approach the three-year anniversary, we as a business will be doing a huge amount of activity and promotion, as the performance of the funds has been strong.

"The business opportunity for us is that, while other firms have brought passive multi-asset fund ranges, no one else has brought an actively managed range range at this price point, and that’s why I think we will generate many billions a year of inflows from this product range in the years to come.” 

The funds are managed by Paul Niven and his colleagues on the broader multi-asset team at BMO, all of whom also work on other products.

david.thorpe@t.com