Leading global investment manager Schroders has today launched its first direct-to-consumer managed fund on the ASX, bringing its highly successful multi-asset real return strategy to a broader range of Australian investors.
The Schroder Real Return Fund (Managed Fund) ASX:GROW is based on Schroders’ successful Real Return CPI Plus 5% fund – which at 31 July 2016 had delivered a 6.4% p.a. post-fee return to investors since inception in October, 20081. The fund is one of the longest running global multi-asset funds targeting real returns with low volatility for Australian investors.
GROW is the first active, global multi-asset exchange traded managed fund, that isn’t a hedge fund, made available on the ASX.
CEO of Schroder Investment Management Australia, Greg Cooper, said the move to offer the strategy via an exchanged quoted managed fund structure reflected the growing desire of many retail investors, and specifically SMSF investors, to improve portfolio diversification and boost returns – but through a preferred quoted format.
“GROW has been launched in response to investor demand for simple-to-access, diversified strategies that will deliver real returns with lower levels of risk,” Mr Cooper said. “Importantly, unlike many hedge funds with similar objectives, the fund aims to achieve its investment objective of CPI+5% p.a. (pre-fees) over rolling three years without a significant use of derivatives and no leverage.”
Low return environment driving investor changes
Simon Doyle, Head of Fixed Income and Multi-Asset for Schroders in Australia and lead manager for GROW, said investors were slowly coming to terms with the new low return environment – and the need to change their portfolios to achieve future investment outcomes.
Data from the ATO, Morningstar and Chant West shows that portfolio diversification varies widely across different Australian investor groups – with direct investors, as well as independently run SMSFs, indicating far less diversification than investors advised by financial planners, or within larger institutional (super) funds.
Mr Doyle said GROW would target brokers and accountants as well as direct investors – as the fund responds to a number of common issues faced by SMSF and higher net worth investors: the need for better diversification and therefore better protection in volatile markets; the desire for real returns in a low return environment; the need to quickly and easily adjust exposures as risk premia change; and more direct and efficient access and administration.
“The problem with many Australians’ portfolios is that with high allocations to a few listed shares and property, people have very high exposures to the same themes, very low protection from certain risks and, overall, little true diversification,” Mr Doyle said.
“With historically low interest rates around the world, investors need to make some changes – so they can be far more dynamic in their management of asset allocation and ensure they have much better diversification of both risk and return. GROW provides all of this in a simple, packaged solution and without the use of complex derivatives or leverage.”
GROW has a low minimum investment hurdle which means investors can now access a diversified active portfolio of assets with less than $1,000 to invest.
Schroders currently runs around $8.0 billion on behalf of both institutional and intermediary clients in real return or objective-based strategies.
The flagship Schroder Real Return CPI Plus 5% fund continues to be rated highly by independent research houses in Australia. Schroders was also named the Best Multi-Asset Real Return Manager at the 2015 Professional Planner / Zenith Awards, and are a finalist in the upcoming 2016 awards later this year. In 2015 Schroders was also named Multi-Asset Manager of the Year UK, at the Global Investor Investment Excellence Awards.
Notes:
1. Performance based on Schroder Real Return CPI Plus 5% Fund – Professional Class with 0.60%p.a. management fee adjusted to reflect GROW management fee of 0.90% p.a.
