Schroders launches global multi-asset income fund
Schroders has today launched Schroder ISFi Global Multi-Asset Income, an income-oriented product with a wide universe under the $50bn multi-asset team led by Nicolaas Marais, in an aim to satisfy yield-starved investors who are increasingly broadening their horizons to generate meaningful, sustainable income.
The ‘hunt for yield’ is largely unrewarded in core Western World debt, forcing allocators and fund providers to use a broader palette.
Nicolaas Marais (pictured), Schroders’ head of multi-asset investment and portfolio solutions, said: “In a low yielding environment investors are increasingly struggling to narrow their retirement gap without taking on significant risk. In looking for income, their choices have been mainly limited to either bond or high dividend equity funds.
“Our Global Multi-Asset Income product is designed to overcome the artificial barriers posed by asset class-specific income opportunities. We offer a less constrained global search for quality income, while also giving investors the diversification benefits of a multi-asset portfolio.”
Aymeric Forest, senior multi-asset fund manager, will manage the fund itself, and aims to pay a 5% per annum distribution in equal quarterly or monthly instalments, and make total returns of 7% p.a. over a full market cycle.
He will aim to provide sustainable quality income by “dynamically investing in attractive income opportunities across a range of asset classes, regions and sectors”, according to the independent British asset manager.
Whereas some of Schroders’ multi-asset products in the past have invested in single manager funds, Forest will manage the latest product as a single, well-diversified and directly-invested fund.
This new launch broadens Schroders’ offering of Multi-Asset income funds as there is already an Asian Asset Income fund managed using a similar approach and sold in Hong Kong and Singapore.
Forest’s investment targets will include high quality global fixed income and global equity securities exhibiting positive cash flows and strong balance sheets.
He will carefully watch risk management at the security and portfolio level at the same time.
He said: “This fund aims to provide investors with a sustainable income by focusing on both selecting high quality securities across a broad investment universe and on active portfolio construction. We are currently seeing interesting opportunities within equities in healthcare in the UK and Japan, consumer staples in the US and Asia, and telecoms in China and South Africa.
“We are also finding attractive yields in some US municipal bonds and high yield debt and in local currency emerging markets with a loose monetary policy. We are cautiously positioned within our exposure to financials and prefer bonds issued by US and UK insurers to those issued by banks.”