Multi-manager has access to world’s best

[First published in Personal Finance, September 2014]

A multi-managed fund that invests in other funds across the asset classes is the top-performing global asset allocation fund on a risk-adjusted basis over five years to the end of last year.

The Lloyds Multi Strategy Fund (Growth Strategy) earned the Raging Bull Award for outperforming its peers on risk-adjusted returns as measured by the PlexCrown Fund Ratings. The fund achieved a rating of five PlexCrowns, which means it had the best consistent return delivered without too much risk.

The fund’s return on straight performance in United States dollars was 12.81 percent a year over the five-year period to the end of December last year, and the fund was ranked first among its 17 peers in ProfileData’s global asset allocation sector of offshore funds registered in South Africa. The fund’s return was above the 7.31-percent average annual return for that period achieved by its peer group.

Lloyds offers a number of multi-managed funds designed to suit different investor profiles.

The Lloyds Multi Strategy Fund (Growth Strategy) is aimed at the investor who can take some risk in order to earn better longer-term growth than a more cautious fund.

The fund allocates between 25 and 40 percent of its portfolio to United Kingdom-domiciled equity funds, between 15 and 30 percent to international equity funds, between 15 and 30 percent to bond funds, between 10 and 15 percent to corporate bond funds and between five and 15 percent to property funds, according Lloyds Investment Fund Managers.

At the end of December last year it had 34 percent in UK equity funds and 11.94 percent in US equity funds and less than five percent each in continental Europe, Japan, emerging markets and the Pacific basin equity funds.

Lloyds says its multi-strategy funds are managed in partnership with Scottish Widows Investment Partnership (Swip) and Russell Investments. Russell Investments manages the equity portfolio of the multi-strategy funds, giving investors access to some of the world’s most sought-after investment managers (both institutional and retail).

Russell Investments has been researching and managing multi-manager funds for more than 20 years. It blends managers with different investment styles to dilute the risk and capture returns in different sectors of the stock markets.

Swip, which has been sold to Aberdeen Asset Management, manages the bond and property elements of the multi-strategy funds with a long-established and repeatable process, Lloyds Investment Fund Managers says.

Swip also manages the asset allocation of the fund, to ensure that the fund benefits from higher or lower exposures to asset classes in line with Swip’s views on the likely returns of each.

The Lloyds Multi Strategy Fund (Growth Strategy) charges an annual management fee of 1.5 percent. Offshore funds do not publish total expense ratios.

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