Managed by David Jane and Anthony Rayner of the multi-asset team and assistant fund manager, Henna Hemnani, the fund is due to launch on 29 January.
It will sit alongside the other outcome-driven multi-asset products in the range – the Defensive, Cautious and Cautious Monthly Income funds. Compared with the existing trio of funds, the Balanced fund will appeal to investors with a higher risk threshold but will also prioritise capital preservation.
The Miton Balanced fund is unconstrained by benchmarks, meaning it has the “the ability to temper downside risk by aggressively managing equity exposure” particularly during times of market stress, the firm said.
Jane says that is “the beauty of this kind of strategy” and one of the “compelling reasons” the team had for launching the fund.
“A lot of people are concerned that we’re nine years into an equity bull run,” said Jane. “We asked our clients: ‘what would you expect from this fund over the long run?’ Clearly equity like returns with materially less volatility but, most importantly, much greater potential to withdraw capital during difficult times. We can flex the weight of this fund quite materially.”
Like the other Miton multi-asset products, the fund will invest directly in baskets of individual securities to avoid taking stock specific risk.
The Miton multi-asset team has a slightly unorthodox stock selection approach. They deliberately avoid visiting with companies or CEOs, which they say “limited inherit human biases”. Instead, they zero in on companies along macro and thematic lines, screening companies using parameters like liquidity and debt profile.
“We’re not looking to buy the next best US consumer stock,” said Rayner. “We don’t want anything too exciting. The more boring the better.”
Falling in the IA Mixed Investment 40-85% shares sector, the fund is expected to have around 70% allocation to equities, 20% to bonds and 10% in cash around launch. The bulk of its equity weighting will be toward Japan, Europe and Asia.
With close to 100 holdings, it will be slightly more concentrated than the range’s defensive fund, which has a greater exposure to corporate bonds.
In 2018, the team believes “the growth environment is broadly positive” and expects to “see strong growth, and inflation and interest rates edge higher,” said Rayner.
“As a result we’re currently emphasising economically sensitive equities, short duration, good quality corporate bonds and a growing exposure to inflation beneficiaries,” he added. “Our pragmatic approach means we are always willing to change our views as the facts change, and our freedom to move quickly between asset classes ensures that we can actively manage risk for our investors.”
The fund will have income and accumulation share classes – an F share class with an annual management charge (AMC) of 0.50% (OCF capped at 1%) with a minimum investment of £100,000 and a B share class with an AMC of 0.75% (OCF capped at 1.5%) with a minimum investment of £1,000.
