The Seven Investment Management (7IM) Unconstrained Fund is to be renamed the 7IM Real Return Fund and will have a permanently reduced annual management charge, from 6 November.
The fund’s objective – to provide a total return that exceeds UK inflation (as measured by the CPI index) by 2% over a rolling three year horizon – will remain unchanged, 7IM said in a statement announcing the changes.
Whilst the objective is unchanged, 7IM added that it is is also introducing a risk guideline. The risk guideline is that, according to 7IM definitions, means that ‘there will be a moderate risk to capital’.
Originally launched on 30 January 2012, the fund will continue to be team managed by Alex Scott, deputy chief investment officer; Ian Jensen Humphreys, senior investment manager; Camilla Ritchie, senior investment manager and Matthew Yeates, quantitative investment manager.
New name
Robert Poulten, head of sales at 7IM said that feedback from investors and advisers was that the title ‘7IM Unconstrained Fund’ did “not fully reflect” the nature of the fund. The new name – 7IM Real Return Fund – “better describes” the objective of the fund.
“We have seen increasing demand among our investor base, especially those running their own portfolios, for the inclusion of a fund with a real return objective, but without heavy exposure to equity market risk,” he said.
Alex Scott, deputy CIO, 7IM said that in relation to the fund’s current positioning, following the strong performance of equity markets in recent years and with bond market valuations exposed to interest rate rises, the company has been increasing its allocation to assets that it thinks have the potential to provide “uncorrelated sources of return”.
“With no fixed strategic asset allocation for the fund, we have been able to be bolder in allocating to this area and away from broad equity market risk,” he said
Fee change
From 6 November, the fund will no longer have an underperformance mechanism which reduces the amount of the standard annual management charge (AMC). Instead, the fund will have a permanently reduced annual management charge.
| Share Class | Standard AMC before 6 November 2017 | OCF before 6 November 2017* |
AMC after 6 November 2017 |
OCF after 6 November 2017* |
| Class C | 1.00% | 1.26% | 0.60% | 0.79% |
*The OCF figure assumes underlying fund charges and costs as of 31/05/2017 which are subject to change over time.
Previously the 1% AMC (Annual Management Charge) was subject to an underperformance mechanism which reduced the AMC to 0.75% in the event of the fund price being lower that it was 12 months previously. From 6 November, this will be removed.
