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Aviva takes on Gars with three-strong range for Munro

Aviva takes on Gars with three-strong range for Munro

(Update) Aviva Investors is to launch a three-strong absolute return Target fund range for Peter Fitzgerald and Daniel James, which will be overseen by incoming chief executive Euan Munro (pictured).

The multi-asset range will include the Multi-Strategy Target Return fund, which launches on Tuesday, alongside an income-focused fund, set to launch in the fourth quarter, followed by an inflation fund which will launch at a later point.

The Aviva Investors Multi-strategy target return fund will target Libor plus 5%, focusing on three buckets. They are market returns - for example positions that make money on a two or three-year view; risk reducing returns; and opportunistic returns.

The firm is also readying the Target Income fund, which will aim to return 4-6% per annum, while the Target Inflation fund will seek to return CPI+ 3% and will be scheduled for launch in 2015. After that, Munro said, the fund house will gauge investor appetite for further expansion of the range.

The team at Aviva made it clear they were gearing up to create a fund range to rival GARS in terms of assets.

‘We are starting with £100 million across our strategies but they must be scaleable for a multi-billion portfolio, and they must be liquid, although we are focussed on a two-three year view,’ Fitzgerald said.

The Target Return fund will be biased towards developed markets, reflecting the house view that they offer better risk adjusted returns than emerging markets over the next few years. The strategy will have a particular bent to Japanese equities, which the team believes are reaping the benefits from the country’s recent economic stimulus.

Aviva's house view is developed markets can offer better risk-adjusted returns than emerging markets with a bias toward Japanese equities,liquid positions with a capacity for billions, income and inflation- beating funds to follow. 

It is a move that could pose a challenge to Standard Life Investments' Global Absolute Return Strategies fund (Gars), given Munro's previous involvement as a founder member of the Gars team and his following among investors.

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Peter Fitzgerald
Peter Fitzgerald
15/38 in Alternative UCITS - Multi Strategy (Performance over 1 year) Average Total Return: 1.12%
Daniel James
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17/38 in Alternative UCITS - Multi Strategy (Performance over 1 year) Average Total Return: -0.33%
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Euan Munro
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