Article date: 24 October 2007
Smaller pension funds will have access to a lower risk solution without compromising longer-term returns following the launch of the Diversified Strategy Fund this month.
Using a dynamic asset allocation process, the Diversified Strategy Fund aims to generate capital growth through investment in a wide range of assets including conventional assets such as equities and bonds; and alternative asset classes like infrastructure, currency and hedge funds. It also draws on the full range of modern investment tools, including the use of derivatives and portable alpha techniques.
Morley's head of investment development, Paul Moody said: "Recent market volatility serves to highlight the importance of asset allocation, with academic research suggesting that 90 per cent of the variation in pension scheme returns can be attributed to asset allocation.
"The Diversified Strategy Fund is a new style balanced fund that aims to produce equity like returns with bond like risk and takes advantage of the full range of contemporary investment tools and techniques, such as portable alpha1.
"Morley has a long pedigree in asset allocation and we are packaging a technique that has been used successfully with our clients for some time. Now with the Diversified Strategy Fund, we can provide a cost-effective solution to asset allocation for smaller pension funds and also retail investors."
The Diversified Strategy Fund at a glance:
- Potential exposure to a wide and diversified range of assets including alternative investments such as property, currency and hedge funds.
- Managed to an absolute return target: cash +5% per annum gross over rolling five-year period. Aiming to deliver returns without the volatility associated with conventional portfolios.
- Build on Morley's strong capability and experience in managing risk-optimised multi-asset portfolios.
- Flexible and cost-efficient structure - the Diversified Strategy Fund uses a high proportion of Morley's internal capabilities which allows for a more efficient approach to asset allocation and alpha generation, provides greater transparency and avoids significant layering of fees.
1 Portable alpha is alpha created from investments that are not correlated with the beta of an existing portfolio.
For more information contact:
Telephone: 020 7809 8618
Notes to editors:
The value of an investment in the fund and any income from it can go down as well as up. Investors may not get back the original amount invested. Full details of the Fund including the risks and charges associated when making an investment can be found in the Simplified Prospectus available together with the Report and Accounts free of charge from Morley. The first Report and Accounts will be available in December 2008.
Morley is the UK-based asset management business of Aviva plc. Firms within the Morley group of companies manage £168bn (€250bn) from offices around the world as at 30 June 2007.
Morley manages both institutional and retail funds. It also acts as investment manager for a range of retail investment funds, marketed in the UK under the Norwich Union brand and in Europe under the Aviva Morley name. The property team manages in excess of £32bn (€48bn) of UK and European property assets.
- Morley ranks no.1 fund manager in the Thomson Extel SRI Survey, 2007
- Property Manager of the Year, UK Pensions Awards 2007
- Morley's G7 Fund awarded Fixed Income Hedge Fund of the Year, Eurohedge Awards 2007
- Equity End User of the Year - Derivatives Week DEAL Awards 2006
- Property Fund Manager of the Year, Pensions Management Awards 2006
- Best Commitment to Raising Standards of Trustee Education, Engaged Investor Awards 2006
- Property Fund Manager of the Year, Property Week Awards 2006
- SRI Provider of the Year, Global Pensions 2006
- Central European Property Awards 2005 - Outstanding Company of the Year & Investor of the Year
- UK Pensions Awards 2005 - Property Manager of the Year
- Property Week Awards 2004 - Best Property Fund Manager
- Aviva is the leading provider of life and pensions to Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2006.
- Aviva's principal business activities are long-term savings, fund management and general insurance, with worldwide total sales of £41.5 billion and assets under management of £364 billion at 31 December 2006.
- The Aviva media centre at www.aviva.com/media includes images, company and product information and a news release archive.