BMO Global Asset Management has launched an actively managed range of low-cost multi-asset portfolios.
The solution, Universal Multi-Asset Portfolios is designed for advisers and offers an alternative to passive solutions by providing an active management service at a low cost.
The firm said the range is aimed at cost-constrained areas such as auto-enrolment or pension transfers where investment pots may be smaller and overall costs of advice and delivery may be a prohibiting factor.
The three funds, launched within the range, will be managed by the firm's global asset managements (EMEA) multi-asset investment team, headed by Citywire A-rated Paul Niven (pictured).
They will be allocated globally across equities and fixed income and mostly comprise active strategies but may also use passive investments when appropriate.
- BMO Universal MAP Cautious, which targets a cautious volatility level of 6 - 8%;
- BMO Universal MAP Balanced, targeting a balanced volatility level of 8-10%;
- BMO Universal MAP Growth, which targets a mid to high volatility level of 10-12%.
The funds are available to retail investors in the UK and have a capped ongoing charge figure (OCF) of 0.29% and each has a medium return expectation in excess of consumer price inflation (CPI).
Rob Thorpe, head of UK intermediary said: 'Up until now, investors seeking a low-cost multi-asset fund have mostly been limited to portfolios made up of passive solutions.
'We saw a clear gap in the market to provide a low-cost active management solution, particularly at a time of change within the retirement landscape and when many market commentators are arguing that market conditions appear to be favouring a more active approach to investing.
'We also recognise that investors and their advisers want a clear understanding of the likely volatility of their investments, which is why each fund is risk-targeted.'
Niven added that true diversification is about much more than combining different asset classes and requires a cyclically aware, tactical approach.
'Asset allocation is the primary driver of investment returns, however asset class prices can deviate from fair-value in the short-term and the active approach taken within the funds, including fundamental analysis at the asset class level, can help to extract additional value for investors.
'Risk mitigation is also an important part of the investment process. We look at risk factors, volatility analysis and stress tests from a portfolio-wide perspective, as well as specific risks from individual positions and strategies.'