The retail share class is priced at 60bps Annual Management Charge with the Ongoing Charges Figure capped at 140bps. The multi-asset fund of funds structure will be managed by Architas CIO Caspar Rock together with investment manager Harry Darke.
Cedric Bucher, head of UK Funds, Architas, said:
“With the pension reforms from April introducing more flexibility for investors at retirement, coupled with the current low interest rate environment, we believe many people will choose income generating investments over traditional annuities.
“Investors, including those in retirement, who will increasingly rely on their investment income, are finding it harder to identify solutions that meet their income needs. In addition, a large proportion of income investors have undiversified exposure to UK Equity Income alone*. In line with our overall investment philosophy, we have created a diversified fund, both in terms of regional exposure as well as asset classes.
“This new fund is a key part of our overall income offering to advisers and their clients and AXA Wealth’s wider response to the pension changes. Architas today manages some £800mn of income generating funds, offering a variety of income levels with different capital risks associated to each to provide real choice for advisers and their clients.”
The Diversified Global Income Fund will invest in a mixture of active funds, tracker funds, Exchange Traded funds and investment trusts across a broad spectrum of developed and emerging market equity and bonds, alternatives and cash including an element of currency exposure.
Caspar Rock, CIO, Architas, added:
“The fund will invest in a diverse set of equity, fixed income and alternative investment funds to help maximize income and manage the risks while maintaining prospects for capital appreciation. The fund will employ a global allocation approach to ensure it invests in potentially strong regional income opportunities. This will be a truly diversified income portfolio due to its multi-manager structure and the spread of asset classes and geographies.
“Our focus on income producing assets across our existing portfolios means we are well placed to identify the right assets for this new global income fund. The fund includes a significant exposure to alternatives income sources, such as specialist property, social infrastructure, renewable energy and asset leasing funds. These assets in particular have a lower correlation to traditional equity and fixed income markets and their attractive risk return profiles makes them a useful investment tool we use across our portfolios.”
The fund will not be risk-profiled as its principal aim is to provide attractive and sustainable income from exposure to a broad range of asset classes, while managing the risks within the portfolio. However, for reference it has been measured against the eValue Risk levels and it would currently sit within profile 4 of 7, based on an initial portfolio mapping.
Below is a sample asset allocation, which will evolve over time:
Equity 30%
Gov Bond 10%
Corp Bond 14%
High Yield Bond 14%
Emerging market debt 10%
Property 3%
Alternative 17%
Cash 2%
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