M&G announces the launch of the M&G Cautious Multi Asset Fund

M&G has announced the launch of the M&G Cautious Multi Asset Fund, a dynamic new multi-asset fund managed by Citywire AAA rated manager David Jane. The fund will be launched in late February 2007, subject to FSA approval.

The M&G Cautious Multi Asset Fund aims to deliver steady, positive returns across different market conditions by finding the best asset classes and investment themes and backing those ideas with conviction. The fund’s approach is:

Truly multi-asset: investing in equities, bonds and property, plus fixed income sub sectors such as leveraged loans and collateralised debt obligations (CDOs).

Distinctly thematic: asset allocation is complemented by a thematic approach identifying themes (e.g. market cap bias for equities; credit risk for bonds), regional preferences (e.g. developed countries versus emerging markets), sectors and investment styles (e.g. growth versus value). The fund will also have direct holdings to gain exposure to specific themes that are not always possible through investment in funds.

Highly flexible: the manager can act strongly and dynamically on his convictions.

David Jane, manager of the M&G Cautious Multi Asset Fund, comments: “Typical cautious managed funds are often not truly diversified because they omit key asset classes such as commercial property. In addition, there are usually restrictions in how much managers can allocate to one asset class, so the best they can do is tilt the portfolio by a small amount in favour of or against owning an asset class. As a result, these funds do not have the flexibility to back the fund managers’ convictions.

“In developing the M&G Cautious Multi Asset Fund we have tried to create something new. By being truly multi-asset and investing beyond the limitations of traditional cautious managed funds I can reduce volatility through diversification and enhance risk-adjusted returns. By taking a multi-dimensional thematic approach I am able to pull all the investment levers and take advantage of the very best of M&G’s investment ideas. And by having the flexibility to back my convictions I can add significant value by investing in areas that I think will perform the most strongly and avoiding those areas which will perform poorly. In my view there is nothing in the market today that can compare with this proposition and I believe this fund is the first in the next generation of cautious managed funds.”

The M&G Cautious Multi Asset Fund will focus on delivering total returns with the aim of creating wealth for investors over the long term (through a combination of income and growth), but subject to that, the fund also aims to grow income over the long term. David Jane views asset allocation as the most important investment decision in driving returns and will draw on M&G’s unrivalled scale and expertise in equities, bonds, property, leveraged loans and CDOs to identify the most attractive asset classes. The majority of the fund will be invested in M&G’s in-house funds, providing access to M&G’s range of top performing retail funds without incurring additional management costs, meaning that the TER of 1.75% is significantly lower than the average for managed funds.

Jonathan Willcocks, M&G’s Managing Director UK Sales, comments: “M&G has an unrivalled position as the largest active manager in UK equities, one of the largest credit teams in Europe, one of the largest and oldest property managers in the UK and a pioneer in leveraged loans and CDOs. In developing this new fund our starting point was to look at how we could leverage our scale and investment expertise to create something new in the cautious managed sector. The initial feedback we have had from life company partners we have spoken to has been extremely positive and, in a sector characterised by marketing-led offerings, we believe this new fund will provide an investment-led solution for clients looking for with-profits alternatives.”

The M&G Cautious Multi Asset Fund will be available to investors for OEIC (main register) and ISA investments, plus PEP transfers, with a competitive initial charge of 4% (no initial charge option also available) and an annual management charge of 1.35%. The minimum deposits are £500 for lump sum payments and £10 per month for regular savings.