Neuberger Berman is extending its suite of multi-asset solutions with the launch of two UCITS Funds – the Multi-Asset Risk Premia Fund and the Multi-Asset Class Income Fund.
The launch of the UCITS vehicles, subject to regulatory approval, makes these Neuberger Berman strategies available to a wider audience.
Erik Knutzen (pictured), chief investment officer, multi-asset class at Neuberger Berman and lead manager on the Multi-Asset Class Income Fund, says: “A combination of low interest rates, low inflation, muted economic growth and elevated valuations across many traditional asset markets is inspiring investors to look for alternative sources of robust returns and diversification to meet their goals.”
Ajay Jain, head of multi-asset class portfolio management and co-lead manager of the Neuberger Berman Multi-Asset Risk Premia Fund, adds: “Systematic alternative risk premia-based strategies offer investors exposure to sources of return that can be strongly diversifying from factors that have historically been rewarded over the long-term. The fund will have long/short positions in deep, liquid markets across equities, fixed income, currencies and commodities with managed volatility targeting 5 per cent, and will aim to deliver positive absolute returns over a cycle, regardless of broad market performance.”
The fund will use straightforward, yet highly researched definitions of risk premia and seek to exploit four styles – value, momentum, carry and liquidity, which will be combined into a portfolio using a risk parity-based approach. The fund will be well diversified and not overly-concentrated in any style, asset class, or premia and investors will have a high degree of transparency into the underlying premia and drivers of return.
Knutzen says: “For those seeking income, traditional sources of yield may no longer adequately meet the needs of investors in the current low rate environment. We believe thoughtful diversification across multiple uncorrelated income sources is the best avenue to enhancing income yield and dampening volatility.”
The Neuberger Berman Multi-Asset Class Income Fund will seek to generate attractive levels of income by using a best ideas approach to take advantage of multiple, uncorrelated, income sources – in both traditional and alternative assets. In fixed income, the fund will seek opportunities in global sovereigns and credit, EMD, high yield and senior loans. In equities, it will target high dividend global equities, global REITs and MLPs. In alternatives, it will allocate to absolute return strategies, risk premia and options. The fund will also implement tactical investment opportunities and currency overlays.
These new funds will complement the Neuberger Berman Global Dynamic Asset Allocator Fund, which launched in September 2015 and aims to generate absolute returns by systematically allocating to selected macro diversified growth opportunities across all asset classes within a well-defined risk framework. This fund is designed to capitalise on fundamentally driven tactical positioning.
The Neuberger Berman Multi-Asset Risk Premia Fund and the Neuberger Berman Multi-Asset Class Income Fund will be sub-funds of the Irish-domiciled UCITS fund umbrella, Neuberger Berman Investment Funds plc. The funds will launch over the coming weeks, subject to regulatory approval and will be registered for sale in the UK, Europe and Asia.