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Baring Multi Asset Fund has returned 12.3% annualised since inception, against a target of 7.5%
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Manager Andrew Cole has been adding significantly to equities - weighting now over 50%
Baring Asset Management (Barings), the international investment firm, today celebrates the third anniversary of the Baring Multi Asset Fund. The fund, which launched on 20th March 2009, has £110.9m in assets under management and is part of the £5.4bn under management in Barings' Dynamic Asset Allocation strategies as a whole1. The Fund has returned 12.3% on an annualised basis since inception, compared to its target (RPI+4%) of 7.5% over the same time period2.
Andrew Cole, Manager of the Baring Multi Asset Fund comments: "The success of our multi asset portfolios, including the Baring Multi Asset Fund, is that they adapt quickly to changing economic scenarios and market volatility. Having taken a much more cautious line last year than the consensus, we have now adopted a more positive view on a tactical basis.
"The world economy is slowing and Europe is likely to experience a recession this year, but the US economy remains resilient and is still expanding. Policy levers are being pulled more aggressively in Europe, with huge support by the European Central Bank for the banking sector. Investors had become very depressed and our work on valuations suggested the equity risk premium to be high. The long-term problems have not been addressed yet, but no worse news over the next few months should be supportive of risk assets such as equities.
"Recently we have added significantly to equities, taking our holdings up from below 20% last summer to over 50% now. We continue to manage the fund in a way that will preserve investors' capital as much as enhance it, working on the premise that investors want to be able to access their investments when their lifestyle demands it without having to wait for years to recoup the losses from one disastrous stock market period."
Andrew Cole, continues; "Across our multi-asset portfolios we remain focused on our core objective of owning the right assets at the right time. We do not believe in the traditional benchmark split of 60:40 equities:bonds and assuming that traditional portfolio theory will eventually come good. Rather, we are committed to making timely and appropriate asset allocation decisions to minimise the volatility of the portfolio and protect against downside shocks allowing us to pick the low hanging fruit when it is available. Thereby seeking returns equivalent to the long run return on equities but doing so with significantly less risk."
Rod Aldridge, Head of UK Retail Distribution concludes, "With high levels of volatility being experienced in the financial markets and the expectation that this will continue, the appeal of a multi-asset product that aims to produce equity-like returns but with much less risk, is constantly growing within the UK retail market. In the three years since launch, this fund has established an excellent performance record and is growing quickly. It has already has reached an impressive size of £110.9m in assets under management (as at end of February 2012) and has been increasingly adopted by adviser firms both big and small.
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