Threadneedle Dynamic Real Return Fund

With the Dynamic Real Return strategy, our goal is to deliver consistent performance, even in times of market volatility. Rather than constrain our opportunity set, each position needs to earn its way into the portfolio from a return and risk perspective. Having this ability to restructure our portfolio actively is key to navigating the current environment and ultimately delivering a smoother overall investment ride.
The strategy is actively managed, dynamic, diversified and cost effective. It is designed to deliver risk-adjusted capital growth of inflation (CPI) plus 4%, with less than two-thirds the volatility of equities.
Multi asset of the year winner

Reasons to invest

Dynamic asset allocation

The Fund is able to take advantage of opportunities as they present themselves, thanks to its unconstrained asset allocation approach.

Volatility controlled

Holistic risk awareness with a focus on preserving and growing capital over the medium to long term.

Active underlying investments

The Fund exploits active return sources at both the asset allocation and stock selection levels.

Straightforward

Long only, unlevered investment approach across broad asset classes – equities, fixed income, commodities, property, cash and absolute return strategies.

Heritage in asset allocation

Columbia Threadneedle Investments has a proven, long-term investment process that harnesses the expertise of our global investment platform.

Investment Approach

We seek to achieve the strategy’s performance objective by dynamically changing the portfolio risk budget; we are able to select from regional equity, fixed income, property and commodity market exposure where appropriate, but, importantly, the portfolio can also be zero-weighted in any asset class. There is no ‘neutral’ allocation, so every investment position is a risk position. The typical average holding period is 12-18 months, although the actual holding period can vary depending on our investment outlook.

The Asset Allocation Strategy Group uses the output from three proprietary research groups to formulate its macroeconomic and thematic views, and defines the investment environment used to build asset allocation portfolios. This is combined with a valuation framework across all asset classes, and is used by the group to determine its preferred asset allocation and risk preferences. We manage this strategy using a threestage approach, which is outlined in the chart below:

Process Insti

Key Facts

Target
CPI+4%
Volatility
Up to two-thirds of equity volatility
Neutral Allocation
Unconstrained – no neutral positions
Launch Date
June 2013
Asset Allocation Limits
Equity 0-75%
Cash & Bonds 0-100%
Commodities 0-20%
Alternatives 0-10%
Property 0-20%
Implementation
Passive strategies
Physical securities
Internal Funds
Sources of Return
Majority through asset allocation
Additional through stock
selection (smaller proportion)
Lead Portfolio Manager
Toby Nangle
Structure
NURS
Leverage
Long only, unlevered
Liquidity
Daily
Ongoing Charges Figures (OCF)
50 bps

Insights

28 May 2021

Maya Bhandari

Portfolio Manager

Asset allocation update: standing pat

Maya Bhandari looks at how the team has managed its asset allocations over the past couple of months and where they believe the best risk-adjusted returns will come from.
Read time - 6 min
21 December 2020

Maya Bhandari

Portfolio Manager Multi-Asset

2021: gotta have faith – in low discount rates

It's been a tumultuous 2020, but the year ahead will be different and we are positioning ourselves to get the best risk-adjusted returns over the next 12-18 months.
Read time - 7 min
27 November 2020

Covid-19 vaccines, lockdowns and equities

With the Covid-19 case count rising rapidly across the United States and Europe, the immediate economic outlook associated with renewed lockdowns is turning darker.
Read time - 6 min

Literature

PDF

Prospectus – Threadneedle Opportunity Investment Funds

PDF

Annual report – Threadneedle Opportunity Investment Funds

Key risks

Investment risk: The value of investments can fall as well as rise and investors might not get back the sum originally invested.

Investment in Funds: The Investment Policy allows the fund to invest principally in units of other collective investment schemes. Investors should consider the investment policy and asset composition in the underlying funds when assessing their portfolio exposure.

Currency risk: Where investments are in assets that are denominated in multiple currencies, or currencies other than your own, changes in exchange rates may affect the value of the investments. No capital guarantee: Positive returns are not guaranteed and no form of capital protection applies.

Issuer risk: The fund invests in securities whose value would be significantly affected if the issuer either refused to pay or was unable to pay or perceived to be unable to pay.

Interest rate risk: Changes in interest rates are likely to affect the fund’s value. In general, as interest rates rise, the price of a fixed rate bond will fall, and vice versa.

Valuation risk: The fund’s assets may sometimes be difficult to value objectively and the actual value may not be recognised until assets are sold.

Investment in derivatives risk: The Investment Policy of the fund allows it to invest materially in derivatives. Volatility risk: The fund may exhibit significant price volatility.

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About Us

Millions of people around the world rely on Columbia Threadneedle Investments to manage their money. We look after investments for individual investors, financial advisers and wealth managers, as well as insurance firms, pension funds and other institutions.

Investment Options

We offer a broad range of actively managed investment strategies and solutions covering global, regional and domestic markets and asset classes.

Responsible Business

As a leading global asset management group, Columbia Threadneedle Investments aims to deliver positive outcomes that meet the needs of our stakeholders and we commit to always act responsibly, transparently and in the best interests of those who trust us to manage their investments.