The company says the Schroder ISF Strategic Beta 10 Fund will have a target annual return of 6% pa in line with a volatility level of 10%.
Its investment process is based on cross-functional research from part of the company’s 100-strong multiasset team, who use qualitative and quantitative approaches to monitor valuation, momentum and the economic cycle.
The Luxembourg-domiciled fund is managed by multi-asset fund managers, Matthias Scheiber and Ugo Montrucchio.
'Core philosophy'
Scheiber said the fund is based on the company’s core wealth preservation investment philosophy of building portfolios that focus on risk allocations.
“We use fundamental economic theory alongside active asset allocation to help us to balance exposure between economic growth, inflation and defensive assets, as well as strategies that capture behavioural and market inefficiencies,” he said.
“The fund allows us the flexibility to focus on generating returns in strong markets and protect capital value in weak markets.”
Head of pan-European institutional distribution, Miles O’Connor, said the fund had seen considerable demand from European institutional clients looking to generate growth without taking on excessive risk.
“In an environment characterised by uncertainty, we believe this fund could offer clients the opportunity to achieve positive returns in a risk-controlled manner,” he said.
Low risk
Montrucchio is also the co-manager of the Schroder ISF Global Dynamic Balanced Fund, which was launched in July 2012.
The low risk £336m fund invests heavily in German government bonds as well as in the Netherlands and Austria. It is in the top quartile for volatility with a score of 3.68, and has delivered a 12.3% return over the past three years, 6.35% below the average for the rest of the sector.
The launch of the new fund came in the same month that Schroders recorded its highest amount of AUM, at £268bn. As a whole, the business posted a profit of £130.7m in the first quarter of this year.
