Morley launches high alpha TAA fund

Article date: 27 April 2006

Morley Fund Management, oneof the UK’s largest active fund managers, via Aviva FundServices has launched the Aviva Funds Absolute Tactical AssetAllocation Fund - a global tactical asset allocation fund that isunitised in structure with daily pricing. This is believed to bethe first of its kind to be UCITs III compliant.

The fund manager seeks to add an additional 15% per annum above onemonth LIBOR to the entire portfolio. It aims to provide attractiveabsolute returns to institutional and pension funds by takingactive positions in bonds, currency and equities using derivativesto derive additional alpha.

Morley’s head of strategy Adrian Jarvis said that pensionschemes are grappling with the issue of how to fund theirdeficits.

"While LDI might help pension fund trustees sleep at night, in alow-return environment, most schemes can't afford to go down thatroute exclusively. They have to work their growth assets harder butin the rush to move from balanced mandates to specialist they'velost an important source of alpha in global tactical assetallocation (GTAA)," he said.

Head of balanced funds Steve Cleal said recent trends in theindustry have enabled Morley to offer a broader range ofsolutions.

"We believe the increasing liquidity in global derivatives marketsand the advent of UCITs III has given us greater scope to usederivatives in more imaginative ways and design a fund that willallow even small pension schemes to access this lost source ofalpha," he said.

The fund is managed by Steve Cleal and Adrian Jarvis, who aresupported by Morley’s 20 strong strategy and balanced fundsteams. The teams use a combination of proprietary quant models andqualitative analysis to produce the investment forecasts whichdrive their asset allocation decisions.

Morley already applies global tactical asset allocation overlays tomore than £80 billion of funds.

In 2005, the team was appointed to manage a segregated GTAA mandatefor Go Ahead Pensions Scheme with the aim of providing a 1% returnon the scheme’s total assets.

Over the last seven years, Morley’s strategy team hasoutperformed its target return through asset allocation, with valueadded in each year.

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For further information please contact:

Beth Saint
Corporate Communications
Morley Fund Management
020 7809 8125

Notes to editors:

Morley Fund Management

  • Morley Fund Management Limited is the UK-based assetmanagement business of Aviva plc. Firms within the Morley group ofcompanies manage £156bn from offices around the world as at 28February 2006.
  • Morley manages both institutional and retail funds under theMorley brand. It also acts as investment manager for a range ofretail investment funds, marketed in the UK under the NorwichUnion brand, and international funds marketed under the AvivaFunds brand.

Awards

  • Property Fund Manager of the Year, Property Week Awards2006
  • SRI Provider of the Year, Global Pensions 2006
  • Central European Property Awards 2005 - Outstanding Company ofthe Year & Investor of the Year
  • UK Pensions Awards 2005 – Property Manager of theYear
  • Property Week Awards 2004 – Best Property FundManager
  • Pensions Management Provider Awards 2003 – Best PropertyFund Manager
  • Fund Manager of the Year - Pensions Week Awards 2002
  • Specialist Manager of the Year - UK Pensions Awards 2002

Further information about Morley Fund Management can be found atwww.morleyfm.com

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