Frontier Investment Management is expanding its range of multi-asset funds with the launch of the IFDS Frontier MAP Cautious Fund.
The new fund, which is scheduled for launch on 9 February, will incorporate the same eight asset classes as the existing range of funds so that in a single investment, investors gain access to both traditional and alternative asset classes.
The launch of the fund follows the success of the IFDS Frontier MAP Balanced Fund, which launched in 2009 and has raised over GBP80m from a range of leading financial intermediaries in the UK.
The asset allocation of the Cautious Fund has been set to offer investors lower volatility returns than the Balanced Fund. In particular, the proportion of the fund invested into fixed income asset classes will be significantly increased. This asset allocation will also allow the fund to provide a yield to investors and accordingly both income and accumulation share classes are available.
The eight asset classes in the Cautious Fund will be Global Equities, Global Fixed Income, Emerging Equities, Emerging Bonds, Global Real Estate, Commodities, Hedge Funds and Managed Futures. In keeping with Frontier’s other multi-asset funds and the investment philosophy that underlies them, the Cautious Fund will maintain a significant allocation to alternative asset classes. Contrary to some viewpoints, alternative asset classes can provide return streams with low correlations to more traditional asset classes and which serve to dampen overall portfolio risk and thereby increase risk adjusted returns.
Similar to the Balanced Fund, the Cautious Fund will be fully FSA authorised and regulated and be structured as a Non-UCITs Retail Sheme (NURS). It will offer daily dealing and ISA eligibility and is expected to be available through a wide range of platforms, life companies and pension wrappers.
Andrew Cracknell, Head of Intermediary Business at Frontier Investment says: “The new fund has been launched following demand from investors in our existing funds and we also hope that the more cautious asset allocation will open the door to new businesses with a lower appetite for risk or who prefer to work with a range of funds structured for clients of varying risk profiles.”