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Lowes brings multi-asset fund onshore

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Lowes Financial Management has brought its multi-asset fund of funds onshore to widen its availability to other intermediaries and self-directed investors.

The RHFS Diversified Strategy fund was launched in 2010 as a Jersey-domiciled OEIC but has now been moved onshore to give it broader market appeal. The fund which has an impressive track record is managed by Lowes’ senior investment team of  Doug Millward and  Paul Milburn.
 
The fund has no specific limits on exposures to any asset class, geographic area, industry or economic sectors, but as its name suggests, it will always contain a well-diversified portfolio. With Lowes’ strong heritage as an Independent Financial Adviser, the fund is truly multi-asset with research conducted across all investment vehicles, particularly OEIC’s, Investments Trusts, ETF’s and Structured Products, an investment area that Lowes are particular renowned for.

The benchmark for the fund is the FTSE WMA Stock Market Balanced Index. Application is being sought to enter the IA Flexible Investment sector. The fund is currently GBP5.08 million.

Lowes expertise in  structured products has seen the company build a reputation in the industry for sorting the good from the bad. The fund currently has almost 10 per cent exposed to structured products and this will be added to from the secondary market when periods of volatility create buying opportunities.

In terms of equities, the fund currently has its largest exposure to international equities at 54.5 per cent of the portfolio, while UK equities is 29.9 per cent of the portfolio, a 7.6 per cent underweight to the benchmark.

The largest overweight is to European equities, with a 5.5 per cent overweight in comparison to the benchmark, as Lowes believes the region has the potential to recover from a low base.

Millward says: “We believe quantitative easing will have a positive effect on risk markets. The expectation is that QE will force investors up the risk scale which will see a rising demand for equities.”

Similarly, with the same logic about QE, the fund is also overweight Japan, by 4.3 per cent. Other positive moves by Japan include the Government Pension Fund reallocation, and companies looking to improve their earnings and corporate governance.

The fund is underweight bonds with an allocation of 10.2 per cent currently in sterling strategic bond funds as well as a high yield bond fund. The benchmark has an allocation of 17.5 per cent to bonds, namely the FTSE Gilts All Stocks index.

Milburn says: “Where yields are currently on gilts, I don’t see them as having an attractive return profile relative to the risks on the downside. We prefer to invest in strategic bond funds as they have the flexibility to invest across the credit spectrum and manage duration risk.”

There is no exposure to property at present, whereas the benchmark has 5 per cent. Lowes prefer to access the asset class via funds investing in direct commercial property rather than property shares as they feel this provides a better diversification to equity investments.  Concerns over future liquidity have stopped them investing in this asset class so far, but they are currently looking at other opportunities to gain exposure to direct property with a more liquid profile.

Lowes Financial Management managing director Ian Lowes, says: “Investors and advisers will find this fund truly multi-asset in its nature and in tandem with the Lowes ethos of investing, it aims to make consistent capital returns over the long-term.

“Our expertise in structured products is well known, and the use of these investment vehicles with their clearly defined potential outcomes and market protection barriers has played a fundamental role in the fund’s performance to date whilst furthering diversification and reducing volatility.”

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