Miton’s multi-asset team has said it would consider adding an absolute return product to its range.
The team, led by David Jane and Anthony Rayner (pictured), added a fourth portfolio to its range in January, Miton Balanced Multi Asset, which sits in the Investment Assocation Mixed Investment 40-85% Shares sector.
Rayner told Portfolio Adviser the team have discussed the possibility of creating a product for the IA Targeted Absolute Return sector or the IA Flexible Investment sector. However, he said there were no immediate plans for an absolute return fund, stating the range is fairly complete for now with representation across the remainder of IA Mixed Investment sectors.
Jupiter Merlin has recently unveiled a UK-domiciled version of its Real Return strategy, while Invesco Perpetual has come out with a low-cost multi-asset range, a cheaper alternative to its £12.6bn Global Targeted Return fund.
The IA Targeted Absolute Return sector was the top seller in May, attracting £516m in net inflows, and was the fifth best seller in June at a time when UK fund inflows plummeted.
Marketing model portfolios with risk labels
Alongside its latest addition, the Miton multi-asset range also includes cautious, defensive and cautious income portfolios.
The Financial Conduct Authority recently raised concerns about naming conventions for risk-targeted model portfolios in its investment platforms market study.
Rayner said there are problems with risk naming conventions in both the absolute return and mixed investment sectors, with funds exhibiting different risk characteristics than their names imply. “The FCA has a point. It is really difficult to distill risk down to a number or a name. If I said to my gran or my mum, ‘What is more aggressive – defensive, cautious or balanced?’ they probably wouldn’t know.”
The Miton Balanced Multi Asset is the most aggressive portfolio in the boutique manager’s suite of low-volatility outcome funds. It targets two-thirds the volatility of the FTSE 100 over five years.
However, Rayner also said labels like “defensive” and “cautious” are convenient marketing tools that help advisers distinguish between funds. He said the team wouldn’t go through the process of re-naming the portfolios unless the industry starts calling for change.
Miton had £3.8bn in assets under management at the end of 2017, £2.4bn of which is held in its equity funds. Multi-asset funds accounted for £868m of total assets last year, up 29% from the year before.
