The Hong Kong-domiciled Schroder Global Allocator Fund seeks to capture the growth and income potential from global equities with sustainable dividend payments.
Downside risk will also be limited by dynamically allocating assets to investment grade short-term debt instruments and cash.
The fund aims to provide investors with steady monthly income from the portfolio yield. It will be actively managed by the Schroder Multi Asset Investment & Portfolio Solutions team.
Under “normal” market conditions, the fund will maintain allocation to global equities in the 70-100% range, according to the firm. But, during “difficult” market conditions, the fund has the flexibility to reduce its global equity holdings in the range of 10-70% of the assets to limit potential losses.
The rest of the corpus will be deployed in cash or equivalent short-term debt instruments, such as treasury bills.
According to John McLaughlin, head of portfolio solutions, a specialist risk management team carries out the risk management process, utilising volatility and other indicators to dynamically adjust the fund’s equity exposure so as to “give investors a smoother ride.”
In view of the current conflicts in Ukraine and Middle East and prevalent low yields on bonds, Garth Taljard, head of multi-asset products in Asia said: “We believe it is the right time to offer investors a fund that provides better return and income potential than cash or bonds, and dedicated risk management to help investors reduce volatility.”
In terms of country allocation, the scheme will seek to target allocation to North America at 36.4% of the assets, followed by Europe and Asia Pacific at 22.3% and 20.0%, respectively.
The top three picks in terms of targeted sector allocation is financials, with 18% weighting in the portfolio, followed by energy and consumer staples that might have a 14.5% and 13.1% weight, respectively.
The fund will be open for subscription from 1 September until 26 September and will be available in RMB hedged, AUD hedged, Hong Kong dollar and US dollar share classes.
Investors can invest in the fund with a minimum sum of HK$5000 (£388.33), RMB5,000 (£489.57) or $1,000 (£601.79) and the additional investments are also similar – HK$5,000, RMB5,000 or $1,000.
The fund charges an initial subscription fee of 5% of the gross assets while the management fee is 1.5% and 0.75% on class A and class C unit class, respectively.
Schroder’s launch of new fund comes at a time when asset management companies are seeking to expand their multi-asset capabilities like Nikko Asset Management, which this week announced setting up a global mutit-asset team in Singapore. Just a day before, Manulife Asset Management created a new role to expand asset allocation capabilities.
