M&G Investments is to launch a defensive multi-asset fund aimed at investors with a cautious outlook on markets and who want to cap their exposure to equities.
The M&G Prudent Allocation fund, scheduled to be available for investments from 23 April, has been designed for investors who want a multi-asset portfolio but with the comfort of knowing there is a current internal limit set of a maximum of 35% of the total fund being invested in equities.
The fund strengthens M&G’s range of multi-asset funds – the M&G Dynamic Allocation and the M&G Income Allocation funds – and complements the M&G Optimal Income fund.
The managers of the new fund are Juan Nevado and Craig Moran. They believe the fund has the potential to deliver gross annualised returns of between 3% and 6% over rolling three year periods, combining capital growth and income, while maintaining fairly low volatility of the investor’s capital – between 3% and 7% over the medium term.
Behind the fund’s investment approach is the tried and tested strategy of M&G’s 14-strong Multi-Asset investment team. Over the past 15 years, the team has developed a robust investment approach which combines valuation analysis and behavioural finance.
The fund will be pushed for sales in Italy in particular, where the low-risk profile is seen as particularly suitable to local conservative investors.
Matteo Astolfi (pictured), director – head of M&G Italy, said: “In a climate of persistently low interest rates, clients are looking to multi-asset funds as alternatives to cash and even fixed income funds, but want the reassurance that their exposure to the equity market will be limited.
“The M&G Dynamic Allocation fund has delivered 7.25% annualised returns year to date, with a maximum equity exposure of 70% and a volatility profile of between 5% and 12% per annum. While many of our clients have been very happy with performance, some are more cautious and want a more defensive fund. The M&G Prudent Allocation fund is for them.”
The M&G Prudent Allocation fund is registered for distribution in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, The Netherlands, Norway, Spain and Sweden. The registration process for Switzerland is still in process. The fund will not be available for UK investors.
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