Dan Kemp co-head of investment consulting and portfolio management, EMEA for the group said the portfolios aimed to help investors take advantage of the massive opportunity for income investors created by the budget changes announced earlier this year.
“We started from the ground up rather, than is the case for many such portfolios, adapting a growth strategy to get more income,” he explained, adding that because traditional asset allocation models use the same capital market assumptions and optimisation process for both growth and income portfolios, they “do not consider the ability of the portfolio to deliver a sustainable income and can lead to investors overpaying for high-yielding assets.”
According to the group the new Moderately Cautious Income portfolio and the Moderate Income portfolio draw on Morningstar’s global investment and manager research capabilities and combines multi-asset investment techniques with a focus on the stability of the income stream.
Importantly, Kemp said: “We are not targeting a specific yield, rather these portfolios are designed to provide a sustainable level of yield over the long term. Income stability is at the heart of these portfolios.”
The two new portfolios will lie alongside the five existing risk profiles – cautious, moderately cautious, moderate, moderately adventurous, and adventurous – and are all actively managed by group’s portfolio management team, supported by investment consulting professionals in London and Paris, the group said.
