Investec has launched a diversified growth fund, managed by Philip Saunders, as part of its creation of a new range of risk-rated funds ahead of the RDR.
The Investec managed solutions range is made up of four funds. Alongside the newly launched Investec diversified growth fund sits Alastair Mundy’s £2.2 billion cautious managed fund, and the £405m multi-asset protector and £40m managed growth funds, both run by Saunders and Max King.
David Aird, the managing director of the UK client group at Investec, says the funds are all designed to deliver outcomes, rather than beat specific benchmarks.
“The whole industry is predicated around beating benchmarks, but do they mean anything?” says Aird. “We would say no, investors on the street understand outcomes and there are five main ones they want.
“The first is capital growth, and for this we have the managed growth fund. The second is growth but with protection, and for this we have Map, and the third is growth and income, with investors wanting their capital to grow but also get some yield and for this we have cautious managed.”
The fourth outcome, he adds, is a growth portfolio that both keeps pace with and outperforms inflation, and this is where the diversified growth fund comes in.
Under Saunders, the head of Investec’s global multi-asset team, the fund – which has been seeded with £25m – seeks to achieve the consumer prices index inflation rate plus 5 per cent per year over a three-to-five-year time horizon.
The fund invests in a range of asset classes, grouped into three baskets: growth, defensive and uncorrelated. The asset classes include equities, currencies, commodities, fixed income, private equity and alternatives. Exposure will come through externally and internally managed funds and direct investments.
The fifth outcome, demand for income, is a gap Aird says Investec will fill by the end of the year.
“Income comes from multiple asset classes,” he says. “We want a product that not only delivers an attractive level of income, but can also grow this income.”