Ninety One has rebranded its Cautious Managed fund, formerly run by Alastair Mundy, which has been twice flagged in its value assessments for poor performance.
From 4 October the £951m fund will now be known as the Global Income Opportunities fund.
A Ninety One spokesperson said the name change “better reflects the key characteristics of the fund’s investment objective, policy, and strategy, including its ability to invest globally without restriction and its focus on aiming to deliver a reliable level of income, together with opportunities for capital growth”.
Alongside the fund’s rebrand, its investment objective has been tweaked to reflect the fact the fund prioritises income ahead of capital growth.
The investment policy has also been modified to make it clear that the fund seeks to limit volatility to lower than 75% of that of shares of UK companies.
The newly amended fund documentation also makes it clearer that the fund “at times” will invest in non-investment grade bonds which are issued by governments and companies with low or no credit rating. At least two thirds of the portfolio is held in global equities and investment grade bonds.
Managers Jason Borbora-Sheen and John Stopford took over the fund last April after Mundy (pictured) relinquished his portfolio duties due to health reasons.
A Ninety One spokesperson said there would be no changes to the way Borbora-Sheen and Stopford manage the fund, nor its risk profile.
However, the fund is changing the way it calculates its global exposure risk from a ‘commitment’ approach to an ‘absolute VaR’ method, which Ninety One said is more appropriate for multi-asset funds with an absolute return benchmark.
Global Income Opportunities has been plagued by performance issues in recent years. Over three and five years it has generated returns of 0.3% and 8% versus the IA Mixed Investment 20-60% Shares gains of 14.8% and 25%.
The fund was flagged in both Ninety One’s assessment of value (AoV) reports for failing to consistently beat its UK CPI +4% benchmark.
In the latest evaluation, the Ninety One fund board said it was satisfied with actions taken to address performance issues but warned “it will take time before the impact of these actions are visible”.
Earlier this year Ninety One also announced it had combined Mundy’s former UK Total Return and UK Special Situations funds which saw assets shrivel during the coronavirus pandemic.
See also: Ninety One to merge pair of Alastair Mundy’s shrinking funds
