The HL Multi-Manager Strategic Assets fund will launch with an 18 per cent allocation to cash as key managers have taken a defensive stance, Lee Gardhouse, fund manager at Hargreaves Lansdown says.
The fund, which launches on 9 February, will have 75 per cent invested in core funds that are run by managers with long track records, such as Newton Real Return, Troy Trojan and Artemis Strategic Assets.
“At outset the asset allocators have their guards up and have positioned their portfolios relatively defensively with around 18 per cent in cash,” Gardhouse says. “With all the concern in the global markets at present this should provide some capital shelter with plenty of firepower should they start to see attractive valuations and opportunities.”
The fund, which aims to benefit from a rising market as well as offer protection from downturns, will also take a defensive stance in its fixed income allocation, comprising 41 per cent of the portfolio, with Gardhouse dubbing corporate bonds “acceptable rather than attractive”. Holdings will include the Invesco Perpetual Tactical Bond and M&G UK Inflation-Linked Corporate Bond funds.
Woodford Equity Income and Stewart Investors Asia Pacific Leaders will feature in the equity component (36 per cent), which will be largely UK-focused, although Gardhouse adds that they will be looking to take advantage of “undervalued” Asian stocks.
“The exposure to Asian stocks is a deliberate asset allocation call on our part, as we believe these look undervalued with good prospects for long-term returns,” he says.
Within the fund’s equity exposure, 58 per cent will be to the UK, 14 per cent to Europe, 12 per cent to the US, 11 per cent to Asia Pacific and 5 per cent to Japan.
The fund has an ongoing charge of 1.45 per cent but no initial charge.