Groups outline absolute return plans

Aviva Investors and Threadneedle are the latest groups considering adding absolute return offerings to their fund ranges.

Threadneedle is looking to build on its Ucits III capability, with a view to launching more absolute return vehicles under this structure.

Madeline Forrester, Threadneedle’s head of UK distribution, says: “We have a thorough under­standing of Ucits III. One area to explore is whether we need to deliver more total return products such as our Absolute Return Bond fund.
“At the moment, we do not have an absolute return equity fund, but it is under consideration and we may do one in 2009.”

The group may also develop its 130/30 range, which comprises the American and Global Extended Alpha funds, Forrester says.

Meanwhile, Aviva is planning a British absolute alpha fund,
slated for launch towards the end of April.

Initially, it is likely to be focused on the British market, but could be expanded to become a global mandate at a later date. It will be run by two recent hires with long/
short experience on the UK equities desk, although the group says the lead manager has not yet been confirmed.

The fund aims to rival offerings from BlackRock and Cazenove in the absolute return space, but John Clougherty (pictured), the managing director of retail investments, insists it will not be a copycat product.

“This is an area of the market we are actively researching. We are looking at developments in the asset class and assessing demand, which we think will be strong for this type of product,” he says.

“We are talking to advisers to see if there is a gap for this fund and that we can differentiate it.

We do not want to launch a ‘me too’ fund, we want to launch it to meet demand.”

Clougherty says Aviva has been reviewing its fund range since its rebrand last year to ensure every product is relevant to the retail market. The group may close or merge away some smaller offerings and will also look to bring offshore products onshore where there is a market for them, he adds.