Generali has launched the GIS Global Multi Asset Income, aimed at investors looking for a well-diversified, multi-asset portfolio with a long-term aim of stable income and growing capital.
Managed by Generali Investments’ multi-asset team, the sub-fund will allocate globally across different assets classes with attractive yields.
Multi-asset strategies aim to address different issues, either related to market fundamentals (pressure of lower returns and yields), risk management (controlled volatility and/or reduce tail risks) or investment objectives (flexibility to capture different market opportunities).
Furthermore, these strategies respond to most investors’ concerns: a smoother investment path with some level of protection in falling markets, achieving real returns with lower volatility than global equities, or aiming for positive returns regardless of market direction.
The GIS Global Multi Asset Income will seek to generate income through dividends, coupons and options’ premiums (call option), with a target income distribution of 4 per cent (gross) per annum. Income distribution is available on a quarterly basis.
Santo Borsellino (pictured), CEO of Generali Investments, says: “With yields at an all-time low and volatility back on the agenda, our clients are increasingly asking for sound investment strategies capable of delivering returns without concentrating market risks in one single asset class. Leveraging on a robust asset allocation process and on the strong expertise of our macro-research and fixed income teams, the GIS Global Multi Asset Income provides the necessary flexibility to benefit from attractive opportunities in different asset classes, without taking unwanted and unneeded concentration risks.”
The GIS Global Multi Asset Income sub-fund relies on the thesis that income generation can be separated from the allocation process, and tactical asset allocation (TAA) plays a central role in delivering sound returns.
The three-step investment process begins with the strategic asset allocation (SAA), which provides the average portfolio asset allocation over the long term, based on a constant risk / return mix approach; a balanced allocation across the main asset classes allows diversification maximisation, whilst minimising volatility and capturing yield opportunities.
The SAA is then adapted to a particular market environment (shorter time horizon) through the TAA, which adds an important degree of flexibility to react to market opportunities. The TAA inputs and decisions are supported by Generali Investments’ macroeconomic research and investment teams.
The third and final step is the volatility control mechanism, to maintain a constant risk profile and limit the drawdowns of specific asset classes.