Morningstar launches discretionary income portfolios for UK

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Morningstar Investment Management Europe has launched two income portfolios as part of its Managed Portfolio discretionary fund management service for the UK market.

The two are the Moderately Cautious Income and Moderate Income portfolios, which are offered alongside existing active and passive portfolios.

Each of the two new funds use Morningstar’s investment and manager research capabilities, and seek to combine multiasset investments with a focus on generating income. The Investment Management Europe team uses the provider’s investment consultants based in London and Paris. Any actively managed funds in the income managed portfolios are expected to hold a Morningstar OBSR Analyst Rating “where an appropriate rated fund is available for selection”. Morningstar’s affiliate Ibbotson Associates assists on the asset allocation, while manager research draws from Morningstar’s researchers across Europe, Asia, Australia and North America.

The Managed Portfolios range launched in May 2013 and works to five risk profiles of Cautious, Moderately Cautious, Moderate, Moderately Adventurous, and Adventurous.

Dan Kemp, co-head of investment consulting and portfolio management, EMEA, for the Morningstar Investment Management group, said: “Traditional asset allocation models are poorly suited to building income portfolios. Because they use the same capital market assumptions and optimisation process for both growth and income portfolios, traditional models do not consider the ability of the portfolio to deliver a sustainable income and can lead to investors overpaying for high-yielding assets. Using bespoke capital market assumptions and an optimisation approach specifically designed for income investing, we have created completely new income portfolios that aim to meet investors’ increasing need for a sustainable income.”



Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 17 years he has been based in London writing about funds and investments. From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope. Jonathan was awarded Editor of the Year at the Professional Publishers Association (PPA) Independent Publisher Awards 2017. Shortlisted for the same in 2016, he was also shortlisted in 2017 and 2015 for the broader PPA Awards category Editor of the Year (Business Media).

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