Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Schroders aims to beat inflation with wealth preservation fund

Schroders aims to beat inflation with wealth preservation fund

Schroders has launched a low volatility multi-asset fund for its EMD, Currency and Commodity investment team, that will aim to protect investors from creeping inflation.

The US dollar-denominated fund, Schroder ISF Wealth Preservation will be lead managed by Malcolm Melville and will target high net worth individuals and retail investors in the UK and overseas.

The fund, which has been seeded with in-house capital, can invest in equities, bonds, currencies, cash and commodities and is designed to protect investors from the longer term threat of inflation. It will be able to go 100% into cash if market conditions dictate.

Melville will oversee a team of five managers drawn from Schroders' Emerging Market Debt (EMD), Currency and Commodity group which manages a total of $14.4 billion in assets. The fund will screen for holdings based around four distinct pillars of analysis: quantitative, technical, fundamental and sentiment.

The investment process, which involves analysts and managers visting different countries and then deciding whether to invest or remain in cash,  is the one used on the firm's €4 billion Schroder ISF EMD Absolute Return fund, headed up by Geoff Blanning which has returned 18.4% over the five years to the end of December.

Melville, who joined Schroders from Caxton Asset Managers in 2010, told Citywire Global that the fund would be an easy to understand, plain vanilla offering with cash its largest initial allocation. It can also hold up to 100% in fixed income and 50% in equities, although currently it had very low exposure to bonds.

He said: 'It is very simple, has no leverage and no complex derivatives. In terms of equities we have launched with our biggest overweight to Japanese equities, which have been out of favour for some time. All our positions are small, and we can only add to them if they are making money. There are also some selective Asian equities and some German and UK positions.'

Melville said the fund, which launched on 30 January,  also had some commodities exposure through direct holdings in gold and silver, as well as to listed gold and silver companies. In terms of currencies, it has a small initial exposure to the euro, as well as to the Indian rupee and Thai Bhat.

Melville added: 'The Indian currency has depreciated for the last few years but now there are significant policy changes afoot in the country.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Play Boutique tapes: are top managers better off at small firms?

Boutique tapes: are top managers better off at small firms?

In episode three of our series, boutique bosses discuss whether the best fund managers are more likely to thrive at smaller firms.

Play Boutique tapes: if you want a Ferrari, you have to pay for it

Boutique tapes: if you want a Ferrari, you have to pay for it

In the second part of our four-part series, boutique bosses are asked how they can justify the fees charged by active managers.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter