The four funds each target a specific return above consumer price inflation and follow on the heels of two income focused managed portfolios launched in October.
According to the group, the four funds are designed to support the financial planning process by providing advisers with both realistic and explicit target returns.
The launch continues a trend evident for much of last year toward the launch of products that focused on specific rather than purely benchmark-related outcomes.
Dan Kemp, co-head of investment consulting and portfolio management, EMEA, at Morningstar Investment Management, told Portfolio Adviser that the launch of these products coincided well with the increased focus by investors on specific outcomes.
“These products are designed to help IFAs build outcome-based solutions for their clients,” he said, adding: “We believe we will increasingly see investment strategies judged by their ability to meet a specific investment objective or their ability to beat inflation.”
According to Kemp, the group has been successfully managing similar, real return-focused portfolios in Australia since 2009.
Designed to “exploit the behavioural bias of investors toward excessive pessimism”, Morningstar said the group scrutinises over 150 asset classes for mispricing.
Asked if the firm had any plans to further expand its discretionary offering, Kemp said that at present it was pretty well stocked and no further launches were planned.
The four portfolios are
| Portfolio Name | Real return target | Min / max equity weight |
| Real Return 100 | CPI +1% | 0 – 40% |
| Real Return 300 | CPI +3% | 20 – 70% |
| Real Return 500 | CPI + 5% | 60 – 100% |
| Real Return Flexible | CPI + 4% | 0 – 100% |
