Schroders range of multi-manager funds offers investors an efficient method of gaining exposure to traditional asset classes such as bonds, equities and property plus a range of alternative asset classes.
The range of three funds has been designed to deliver levels of volatility equivalent to 50%, 75% or 90-100% of the FTSE All Share index respectively.
Each fund has a broad target range for holding equities, bonds, alternatives and cash.
Schroders head of multi-manager funds, Andrew Yeadon, said: “Our funds are designed to be as flexible as possible within these boundaries.
“The thing I feel most confident about over the next six months is commercial property. We bought in during the summer as it is the only one of the main asset classes yet to recover.
“If you compare it to historic nominal capital values, we were able to buy into commercial property at mid-1990s prices.”
The range of funds is run on a multi-manager basis, meaning that they provide exposure to “best-of-breed” funds in each sector.
The investment process starts with Mr Yeadon setting the long-term investment framework, which then drives the asset-allocation decisions.
Only then does the eight-strong team begin the process of filtering the thousands of investment funds by using a proprietary research tool and by carrying out hundreds of fund-manager interviews each year.
On the potential problems ahead for UK Government debt, Mr Yeadon said: “We still prefer corporate bonds as although spreads (the additional return over government bonds) have narrowed considerably they are still attractive compared to the long-run average.
“We think the low-interest-rate environment is pretty supportive for equities, which are reasonable value and that growth in 2010 is more likely to surprise on the upside than on the downside. Although there will be continued volatility, markets will climb the wall of worry.”
All three funds in the range have delivered above-average performance in three out of the past four calendar years and look on course to do so again this year.
The strategic balanced fund has returned 26% so far this year compared with a return of 18.2% from the balanced managed-fund sector average.
Barry O’Neill is a chartered financial planner with Thomson Shepherd. Contact him on 01224 619215