UK - A shift away from balanced mandates is forcing some fund managers to reinvent their product ranges.
Allianz Dresdner Asset Management has launched ADAM Vision, a fund which, it says, will breathe life into the “stagnant” balanced investment approach.
The fund will draw on expertise throughout the Allianz Dresdner group, with money being allocated to all of its subsidiaries – fixed income house Pimco, global equities manager Dresdner RCM Global Investors and the US large-cap value manager Oppenheimer Capital.
Pimco managing director and ADAM Vision chief investment officer Lee Thomas said the fund combined elements of multi-manager, traditional balanced funds and absolute return products. The fund’s performance target is set to return at least 200 basis points, and it will have equal risk exposures on many investment positions with uncorrelated risk characteristics.
Thomas claimed traditional balanced funds were now “second rate” and ADAM Vision differed from its peers in that it relied on multiple asset classes, managers and investment styles to produce stable, consistent positive returns.
Several of the country’s largest fund managers – such as Schroder Investment Management and Deutsche Asset Management – have seen their balanced assets under management evaporate as schemes increasingly turn to specialist management.
Buck Consultants senior investment consultant John Walbaum said the trend away from balanced mandates was “irreversible”.
He said: “I wouldn’t say balanced is dead, but it is very unlikely that we’d put new money into a balanced fund.
“Where it has survived so far it has been in fortunate circumstances where the asset mix looks sensible relative to the liability profile. That’s quite rare these days, and it is becoming increasingly rare with schemes closing.”
PSolve consultant Bruce Rogerson agreed.
He said: “The move away from balanced is the way of the future, and we’re definitely recommending a more specialist platform to our clients.”
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