23 April 2019
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LGIM has unveiled sterling income share class to address a growing client demand. It will be available to investors in the UK and is aimed at those who are seeking a regular cashflow from their investment, while maintaining capital growth, for example during retirement.
The fund has consistently outperformed sector peers posting 7.2 percent returns vs. a 5.5 percent target since launch over the last three years, while offering an attractive yield of 3 percent historically.To meet clients' demand for an income paying version of the strategy the new share class will pay out the funds natural income to investors on a quarterly basis. The aim of which is to offer a smooth income profile over the longer term.
L&G Multi-Asset Target Return GBP fund which was launched in 2015 has an unconstrained investment approach, and aims to provide a competitive alternative to equities with a cash +5 percent return target per annum over rolling three-year periods. The fund has a unique portfolio design in terms of how it looks to generate returns and manage risk.
The new strategy aims to have a low reliance on market direction and provides capital preservation. This is achieved through a strong focus on risk management which is guided by three distinct risk objectives: reduce overall volatility; limit the correlation of the fund's performance with that of global equities; and limit the potential losses of the fund due to equity market falls. In practice this means we aim to keep the equity beta below 0.4 on average over a three-year rolling period while limiting the downside participation to less than 40 percent of equities during significant downturns. It has the flexibility to implement short term views on asset classes, countries, currencies and sectors and there will also be specific trades aiming to provide positive performance during difficult market environments.
This continues to be managed by Emiel van den Heiligenberg, Willem Klijnstra, John Roe and Chris Teschmacher. A SICAV version of the fund was also launched earlier in the year to meet the increasing demand from international clients. The LGIM team manages more than £50bn in multi-asset strategies globally, on behalf of retail and institutional investors.
With a truly flexible investment approach, the fund will harness LGIM's investment expertise in asset allocation, active equity and fixed income. It will also take advantage LGIM's scale in low cost index strategies and the expert dealing desk, providing significant savings for investors.
