State Street Global Advisors launches Dynamic Diversified Fund
State Street Global Advisors (SSgA), the asset management business of State Street Corporation has launched a Dynamic Diversified Fund within its flagship Managed Pension Fund.
The new fund is designed for pension schemes to actively invest across traditional asset classes such as equities or bonds as well as alternatives such as commodities, real estate and infrastructure.
Market volatility has driven an increased client demand for active tactical allocation rather than the traditional approach of holding a static asset allocation.
The fund’s dynamic tactical asset allocation will be driven by SSgA’s innovative Market Regime Indicator (MRI). The MRI is a proprietary model that converts market signals into an indication of market sentiment.
The new funds will be managed by SSgA’s Investment Solutions Group (ISG), which has more than 50 investment professionals based in global investment centres offering perspectives on every region, issue and client type.
‘The new fund allows clients the potential to participate in rising markets and manage their asset allocation whilst attempting to limit the risk of significant drawdowns when markets fall. The dynamic asset allocation model is designed to deliver a smoother investment path by switching into the right asset at the right time. The fund also benefits from a sophisticated risk control mechanism in an effort to guard against downside risks,” said Susan Raynes, head of SSgA UK, Middle East and Africa.
Andrew Soper, head of UK and Ireland portfolio management added: “Financial markets have changed. Previously safe asset classes are no longer dependable, whilst historically high performing asset classes have performed poorly. There is broad recognition that a static asset allocation is not optimal under all market conditions. Our high conviction strategy will aim to divest completely from some asset classes if necessary or rapidly switch into assets when the time is right.