Key Takeaways
- • Quilter Investors has added a hedge fund replication strategy to its Cirilium Passive Portfolios, marking the first time an alternatives fund has been used in the range.
- • The Goldman Sachs Absolute Return Tracker fund forms the alternatives allocation, which sits at about 7% across the Conservative to Dynamic risk profiles.
- • The Adventurous portfolio does not hold the alternatives asset class, as it invests solely in equities.
- • Quilter is seeding a new passive alternatives fund from another unnamed "major asset manager" that will be announced later.
- • The fixed income allocation has been broken into four sub-asset class funds, giving the team more flexibility over weightings.
Summary
Quilter Investors has added a hedge fund replication strategy to its Cirilium Passive Portfolios, according to PA Adviser. It is the first time an alternatives fund has been used within the passive range. The vehicle is the Goldman Sachs Absolute Return Tracker fund, a multi-strategy portfolio that takes long and short positions across equities, bonds, currencies, credit and commodities. The fund aims to replicate the performance of an aggregate of the hedge fund industry, based on the performance of 3,000 hedge funds.
The alternatives allocation represents about 7% of the four risk profiles within the Cirilium Passive Portfolios, ranging from Conservative to Dynamic. The Adventurous portfolio does not hold the asset class, as it invests solely in equities. The changes follow recent adjustments to the passive range's strategic asset allocation.
Sacha Chorley, portfolio manager at Quilter Investors, said hedge fund exposure is not widely available in passive fund of funds. He argued that multi-asset portfolios across active, passive and blended strategies should have the tools to enhance diversification and perform across varied market environments. CJ Cowan, also a portfolio manager, praised the Goldman Sachs team and its processes, describing the fund as highly liquid and transparent, and said it would provide diversification to traditional equity and fixed income holdings. Quilter also said it is in the process of seeding a new passive alternatives fund from another "major asset manager", to be announced in due course.
In fixed income, the team has added four new funds to reflect a more "granular" strategic asset allocation. Previously a single broad fixed income index was used. Splitting it into four components gives the team more freedom to vary weightings across sub-asset classes in pursuit of the best risk and return opportunities. The additions are the Vanguard Global Corporate Bond Index fund, the Vanguard UK Investment Grade Bond Index fund, the Amundi JP Morgan GBI Global Government ETF and the Amundi UK Government Bond ETF.
The alternatives allocation represents about 7% of the four risk profiles within the Cirilium Passive Portfolios, ranging from Conservative to Dynamic. The Adventurous portfolio does not hold the asset class, as it invests solely in equities. The changes follow recent adjustments to the passive range's strategic asset allocation.
Sacha Chorley, portfolio manager at Quilter Investors, said hedge fund exposure is not widely available in passive fund of funds. He argued that multi-asset portfolios across active, passive and blended strategies should have the tools to enhance diversification and perform across varied market environments. CJ Cowan, also a portfolio manager, praised the Goldman Sachs team and its processes, describing the fund as highly liquid and transparent, and said it would provide diversification to traditional equity and fixed income holdings. Quilter also said it is in the process of seeding a new passive alternatives fund from another "major asset manager", to be announced in due course.
In fixed income, the team has added four new funds to reflect a more "granular" strategic asset allocation. Previously a single broad fixed income index was used. Splitting it into four components gives the team more freedom to vary weightings across sub-asset classes in pursuit of the best risk and return opportunities. The additions are the Vanguard Global Corporate Bond Index fund, the Vanguard UK Investment Grade Bond Index fund, the Amundi JP Morgan GBI Global Government ETF and the Amundi UK Government Bond ETF.
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