Threadneedle Pensions Multi Asset Fund

The Multi Asset Fund is suitable for those investors seeking equity like returns in a less volatile manner through a Fund that has hard wired broad diversification limits. The Fund does this by setting broad parameters around equities, fixed income and alternatives. The Multi Asset Team is responsible for the overall portfolio construction, being guided by the Asset Allocation Strategy Group. A group consisting of nine senior investors in the firm including representatives from the Multi Asset Team.

Reasons to invest

Hard-wired diversification:

The strategy has maximum and minimum asset class holdings, that have been developed via scenario testing to achieve equity like returns over the longer term.

Active management:

The strategy is actively managed within its strategic asset allocation parameters and is actively managed at the security level.

Diversified sources of return:

The strategy looks to take advantage of three sources of return; asset allocation, investment themes a stock selection

Investment approach

The Asset Allocation Strategy Group uses the output from Columbia Threadneedle Investment’s three main research groups to formulate its macroeconomic and thematic views, and defines the investment environment used to build multi asset portfolios. This is combined with a valuation framework across all asset classes, and is used by the group to determine its preferred asset allocation.

Process Insti

Key Facts

Target
Cash+4% (Defined as Bank of England Base Rate).
Volatility
Lower volatility than an equity only portfolio, approximately two-thirds the volatility of equities
Neutral Allocation
Equity 40%
Launch Date
10/1/2007
Fixed income 20-40%
Alternatives 30%
Asset Allocation Limits
Equity 30-50%
Implementation
Primarily through Internal Funds
Fixed income 20-40%
Alternatives 20-40%
Sources of Return
Asset Allocation and Stock Selection
Lead Portfolio Manager
Alex Lyle
Structure
UK Life company
Leverage
Long only, unlevered
Liquidity
Daily
Ongoing Charges Figure (OCF)
50 bps

Insights

22 May 2020

Maya Bhandari and Felicity Long

Portfolio Manager & Client Portfolio Manager

Asset Allocation Update - May 2020

Global economic activity has suffered a “sudden stop” as authorities have sought to contain the spread of the Covid-19 virus by shutting down economies.
Read time - 5 min

Literature

Prospectus

Interim / Annual report

Key risks

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.

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 refused, was unable to or was perceived to be unable to pay.

Liquidity Risk: The Fund invests in securities whose value would be significantly affected if the issuer refused, was unable to or was 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.

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