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Product launch of the week: Schroder Global Multi-Asset Income fund

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01/12/2014
This week, we analyse Schroder's Global multi-asset fund, newly launched to UK investors.

What’s new?

Schroders is launching a global multi-asset fund. The Schroder Global Multi-Asset Income fund will be managed by the group’s well-respected multi-asset team and aim to deliver regular income payments of 4-6 per cent per year in monthly instalments.

They say…

Robin Stoakley, managing director UK intermediary, said: “The pension reforms highlight investors’ need for solutions which generate levels of income above current cash returns and offer the potential to protect and grow capital.

“The distribution yield [on the new fund] will be attractive to those investors seeking consistent income, while its multi-asset approach provides greater diversification than is typically available from conventional bond, equity or balanced mandates.”

Good news?

The fund has already been running since May 2012 as an offshore fund, so it is possible for investors to see whether it has delivered good returns. It has done well since launch: it is up around 20% since launch and is significantly ahead of its sector (http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=10F2K&univ=B).

The fund will offer a mix of assets, including stocks and shares, bonds and alternatives such as property. It will also invest across different countries. The multi-asset team will aim to tilt exposure to those areas that offer the best value at any given time. At the same time it will strive to generate an income of 4-6% – not earth-shattering, but better than that available from a bank account.

The fund is pitched firmly at the retirement market. Retirees need a blended fund, which protects against inflation and pays a reasonably reliable dividend. 

Any caveats?

The income is not guaranteed and may fluctuate. Equally, although the fund has delivered good returns to date, that has been against a backdrop of relatively benign bond and stock market performance and it may not be able to replicate those returns in future. The capital, therefore, is not protected.
However, the fund has a broad range of holdings, which mitigates risk to some extent. The Schroders’ multi-asset team is large and has a good reputation, and – as with all large asset managers – has a well-established risk management team.

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