7IM has added a medium-term ‘trend following’ strategy to its Pathbuilder passive multi-asset fund range.
According to the firm, a trend following approach can profit from trends in both rising and falling markets.
The aim is to take advantage of the fact that rising markets tend to continue to rise, and falling markets often continue to fall.
7IM noted trend strategies have delivered strong performance during period of market turmoil and add a further layer of diversification and risk management to traditional passive strategies. They also offer additional defensive properties in environments where market concentration can leave investors highly exposed, as seen in 2022.
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The Pathbuilder funds are underpinned by 7IM’s established strategic asset allocation process, but to keep costs down they allocate to the most liquid and cost-effective traditional assets.
Launched in 2020, the Pathbuilder range comprises four funds with an annual management charge (AMC) of 0.22%. The funds are available on the 7IM platform as well as a range of other adviser platforms.
Matthew Yeates, deputy chief investment officer at 7IM, said: “As many traditional assets continue to move in lockstep, access to deeper levels of diversification has never been more important.
“To respond to this, we’ve bolstered our Pathbuilder range with ‘trend following’. Whilst we have already used trend following for some time in our more active portfolios, we feel the setup can also be very fruitful for our passive portfolios given the current macro environment.
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“Passive to many people can simply mean low cost. For us it’s important that passive means a properly diversified portfolio that follows a strategic asset allocation,” he continued.
“This means constructing something more robust than simply ‘cap weighting’ equities and watering that down with some government bonds. This evolution of Pathbuilder is our latest thinking for a fund vehicle taking that approach.”
