The fund aims to provide a positive total return (combined income and capital growth) of 5-10% on average per year over any three-year period by investing in a mix of assets from anywhere in the world.
Investment policy and strategy
Core investment: The fund will typically invest within the following net allocation ranges:
• 0-80% in bonds
• 20-60% in company shares
• 0-20% in other assets (including convertibles and property-related securities)
The fund typically invests in the above assets via derivatives. It may also invest in assets directly or through other funds. The ranges shown above are on a net basis, that is, ‘long’ positions (investments that profit from a rise in asset prices) net of ‘short’ positions (investments held via derivatives that profit from a fall in asset prices). Using derivatives to invest also allows the fund to create ‘leverage’, meaning that the fund can gain exposure to investments that exceed its value, thus increasing potential returns (or losses) in both rising and falling markets. In addition, derivatives are used to reduce risk and costs and to manage the impact of changes in currency exchange rates on the fund’s investments.
Other investment: The fund may also invest in currencies and hold cash, deposits and warrants.
Strategy in brief: The fund is managed with a highly flexible investment approach. The investment manager has the freedom to allocate capital between different types of assets in response to changes in economic conditions and asset prices. The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of the market’s short-term reactions to events, to identify investment opportunities. The fund seeks to manage risk by investing globally across multiple asset classes, sectors, currencies and countries. Where the investment manager believes opportunities are limited to a few areas, the portfolio may be very concentrated in certain assets or markets. The investment manager will normally hold atleast 30% of the fund in euro, and at least 60% in US dollar, sterling and euro combined.
Bonds: Loans to governments and companies that pay interest.
Convertibles: Bonds issued by companies that usually pay a set rate of interest and which can be exchanged for predetermined amounts of company shares.
Derivatives: Financial contracts whose value is derived from other assets.
Warrants: Financial contracts which allow the fund manager to buy stocks for a fixed price until a certain date.
Risks associated with the fund
The value and income from the fund's assets will go down as well as up. This will cause the value of your investment to fall as well as rise. There is no guarantee that the fund will achieve its objective and you may get back less than you originally invested.
The fund may use derivatives to profit from an expected rise or fall in the value of an asset. Should the asset's value vary in an unexpected way, the fund may lose as much as or more than the amount invested.
Investments in bonds are affected by interest rates, inflation and credit ratings. It is possible that bond issuers will not pay interest or return the capital. All of these events can reduce the value of bonds held by the fund.
The fund is exposed to different currencies. Derivatives are used to minimise, but may not always eliminate, the impact of movements in currency exchange rates.
The hedging process seeks to minimise, but cannot eliminate, the effect of movements in exchange rates on the performance of the hedged share class. Hedging also limits the ability to gain from favourable movements in exchange rates.
In exceptional circumstances where assets cannot be fairly valued, or have to be sold at a large discount to raise cash, we may temporarily suspend the fund in the best interest of all investors.
The fund could lose money if a counterparty with which it does business becomes unwilling or unable to repay money owed to the fund.
Further details of the risks that apply to the fund can be found in the fund's Prospectus.
The Fund allows for the extensive use of derivatives.