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Multi-Asset Strategy
Key facts*
| Investment objective | The strategy aims to deliver a positive return in excess of cash over the long-term by actively managing a diversified portfolio of assets, with a managed level of risk |
| Lead portfolio manager | Alex Lyle |
| Performance target | To outperform the UK base rate by 4% (gross of fees) over a 5 to 7 year-cycle |
| Investment universe | Investment universe comprises three broad asset classes - equities, fixed income and alternative investments |
| Investment limits | Asset class weightings are: equities: 30-50%; fixed income 20-40%; alternatives 20-40% |
| Holdings | Portfolio is invested in a wide range of equity, fixed income and alternative strategies using Threadneedle pooled funds |
Philosophy
We believe that a dynamically managed multi-asset portfolio can deliver positive returns over the longer-term. We seek to exploit active return sources at both the asset allocation and fund selection levels, whilst our focus on proprietary funds enhances portfolio oversight as part of a disciplined risk management.
Process
We use a disciplined process comprising asset allocation, fund selection and risk management. We hold monthly meetings to produce our macroeconomic views, together with recommendations for the global sector and investment themes we want to reflect in our multi-asset portfolios. This strategic analysis is used by our Asset Allocation Committee to produce its monthly reference portfolio, with weightings between asset classes and regional markets reviewed on a weekly basis. The Multi-Asset team uses these model outputs to determine active positions at the fund selection level, whilst our risk budgeting process helps refine final weightings by analysing the portfolio's overall risk / return profile. We use a proprietary risk system to actively manage portfolio risk on an ongoing basis at both the asset allocation and individual fund levels.
* All data as at 31 December 2011. Where references are made to portfolio guidelines or features, these may be subject to change over time and prevailing market conditions. Actual investment parameters will be agreed and set out in the prospectus or formal investment management agreement. Please note that the performance target may not be attained.