Manager Research

We have recently completed a full review of this fund, having first covered it in early 2013.  While the basic elements of the fund remain the same, the team and process have evolved and we now have better visibility of what they are trying to achieve, and how they go about it.  The fund rating has been revised upwards from Tier 3 to Tier 2, with the material concerns we had in 2013 diminishing with their improvements in process and clarity.  Investec have also added to the multi-asset team responsible for this fund, and there are now few managers globally with this depth of resourcing in a global balanced fund.

It remains a relatively standard global balanced fund, which interestingly is out of favour with global investors as the industry has developed more sophisticated products, many of which as a direct result of the global crisis in 2008.  During this time, balanced funds fell up to 45% and clients questioned the validity of diversification in what should be a relatively protected, moderate risk investment product.  The recent emergence of ‘diversified growth/global absolute return/global diversified growth’ balanced fund is testament to this need by investors to source more sophisticated funds which utilise complex strategies to remove the reliance on simple market risk (not too far from the hedge fund world in fact).  The jury is still out on these new funds – our own work in this space (we have covered a significant number) is that managers show limited skill in generating meaningful returns through alternative means, and ultimately capital gains come through the traditional asset classes such as equities, bonds and property.