Quilter Investors has taken a page from rival AJ Bell and is looking to add hybrid active and passive portfolios to its £10bn multi-asset range.
The new portfolios will form part of Quilter Investors’ Cirilium range and are due to launch in the second or third quarter this year subject to regulatory approval. They will be managed by Paul Craig (pictured) who has been at the helm of the Cirilium range for over a decade.
Further details of the hybrid Cirilium portfolios will be teased over the summer but the multi-asset house did clarify that it will feature “a number of portfolios … across different risk levels”.
Quilter chief commercial officer Dean Bowden touted the forthcoming hybrid range as a complementary strategy to the risk-rated Active and Passive portfolios in the existing range and evidence of “the rapid progress the company is making”.
Inspiration from AJ Bell
Fundscape editorial director Gavin Fielding said Quilter was clearly inspired by AJ Bell which launched a ‘pactive’ range this February for financial planners who do not feel it is in their mandate to select whether clients should be invested in an active or passive portfolio.
AJ Bell’s pactive portfolios are aligned to the same six risk levels of its existing MPS portfolios and feature a 50/50 split of active and passive funds which can shift to as much as 80/20 either way depending on market conditions.
Quilter Investors has not yet provided a breakdown of the active/passive weightings in the new portfolios.
The multi-asset house currently manages £19.2bn on behalf of advised clients but some experts have said the group is “playing catch up” with its recent product launches. Earlier this year Quilter Investors secured Janus Henderson’s Helen Bradshaw to spearhead a new multi-asset income range similar to products from Standard Life and Hargeaves Lansdown.
“We have made huge progress since establishing Quilter Investors in 2018 as a new business with a complete rebrand and the appointment of a new exco and leadership team,” said Bowden. “Today marks another huge milestone as we announce the forthcoming expansion of one of the most successful multi-asset investment solutions in the UK.”
Pactive a good middle ground
Fielding expects to see more providers launching pactive products as they are a good “middle ground” between more expensive active ranges on the one hand and passive ranges that are cheaper but may not do so well in a down market on the other.
He notes that performance in 2018 for the Cirilium risk targeted multi-asset funds over three and five years is top quartile with the active Cirilium Balanced Portfolio and Moderate Portfolio topping the IA Mixed Investment 20/60% sector and IA Mixed Investment 40/85% sector respectively.
Higher margin Cirilium makes up 51% of Quilter Investors AuM, up from 44% last year, according to Fielding. The passive portfolios charge 0.60%, while the active range has charges around 1.26%.
“For clients with simple needs the range is demonstrably suitable,” said Fielding. “Intrinsic advisers have to be especially diligent that any replacement business using these ranges has to be better than what the client already has.”
