Schroders, a British multinational asset management company, has launched a range of six new risk-aligned funds that follow a multi-managed, multi-asset investment approach through a combination of asset allocation and active and passive investments.
Announced on Monday, the funds are together called Schroders Portfolios and will give the investors the benefit of a model portfolio with the efficiencies of a unitized fund.
“As we discovered in the Schroders annual adviser survey, 50% of advisers outsource investment management and they expect to increase their use of multi-asset funds and model portfolios this year,” Gillian Hepburn, Intermediary Solutions Director at Schroders, said.
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Regulators keeping a close eye on funds
The funds will have access to both alpha and beta and will be able to invest in a range of assets including investment trusts and ETFs. These are also regulated under the PROD regulation introduced under MiFID II in 2018 and are rebalanced and reviewed on a quarterly basis.
“The investment philosophy is built on the premise of deconstructing the total return formula into its simplest components – Alpha and Beta,” Alex Funk, portfolio manager at the firm, added. “By investing in these two components separately, we aim to achieve investors total return in a more efficient way.”
“We aim to increase our passive holdings on an aggregate basis when the overall economy is moving into an expansion phase. We want to expose investors to the overall market momentum which is best captured through passive investments. Similarly, when the overall economy is set to enter a slowdown or recessionary phase, we want to increase our exposure to active managers to increase our downside protection,”