BMO GAM takes on passives with launch of low-cost active multi-asset range

BMO Global Asset Management has launched a range of actively managed, low-cost, multi-asset funds to offer investors an alternative to traditionally cheap passive funds.

The BMO Universal Multi-Asset Portfolios are aimed at investors with smaller sums such as pension transfer clients.

The three funds in the BMO Universal MAP range invest globally across equities and fixed income, mostly using active stock picking strategies, but with the potential to use passive investments.

Managed by the multi-asset investment team, headed by Paul Niven, the funds are risk-targeted and aim to provide long-term growth within a specific volatility level.

The Cautious fund targets a volatility level of 6-8 per cent, the Balanced fund targets a volatility level of 8-10 per cent and the Growth fund targets a volatility level of 10-12 per cent.

Each of the funds aims to provide a return in excess of CPI over the medium term.

Rob Thorpe, Head of UK Intermediary at BMO Global Asset Management (EMEA), says: “Up until now, investors seeking a low-cost multi-asset fund have mostly been limited to portfolios made up of passive solutions. We saw a clear gap in the market to provide a low-cost active management solution, particularly at a time of change within the retirement landscape and when many market commentators are arguing that market conditions appear to be favouring a more active approach to investing.

“We also recognise that investors and their advisers want a clear understanding of the likely volatility of their investments, which is why each fund is risk-targeted.”

Paul Niven, Head of Multi-Asset Investment at BMO Global Asset Management (EMEA), adds: “True diversification is about much more than combining different asset classes. It requires a cyclically aware, tactical approach that we employ in the management of the funds.

“Asset allocation is the primary driver of investment returns, however asset class prices can deviate from fair value in the short term and the active approach taken within the funds, including fundamental analysis at the asset class level, can help to extract additional value for investors.”

The funds have a capped ongoing charge figure of 0.29 per cent.