Absolute return for BMO Pyrford

BMO Pyrford Global Absolute Return Fund’s goal is to provide a stable stream of long term returns with low absolute volatility and significant downside protection, using a global multi-asset absolute return investment strategy to achieve this.

This gives them the ability to move flexibly as determined by the investment manager between three global asset classes: equities, cash and government bonds.

Michael Angwin, director of intermediary business at BMO Global Asset Management (Asia) Limited, said the multi-asset strategy implements a long-only and unconstrained approach to delivering absolute real returns to investors.

“The Fund has been awarded a ‘Recommended’ rating by Lonsec and currently has over $900 million in assets under management, so yes there’s a good level of support for the fund,” Angwin said.

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“We attribute performance to our approach of seeking to deliver absolute real rates of return by investing in the highest quality equities and government bonds along with cash and active management of foreign currencies within the fund.”

“In the past year, all asset classes within the portfolio have made a positive contribution with Australian and international equities the main contributors.”

The guidelines used by the fund are to apply 20 per cent or less of the fund’s value invested in equities in emerging markets, each equity investment is five per cent or less of the total fund value, and the fund’s holding consists of at least 40 securities.

With an estimated investment timeframe of five years, BMO aims for a return of four per cent or higher than the fund’s benchmark of the Australian Consumer Price Index.

“The equity component of our fund seeks to hold on average a higher yield, higher return on equity and lower debt to equity than the global equity market,” Angwin said.

“These three components help to achieve the fund’s long-term goal of delivering the consumer price index (CPI) of plus four percent with low absolute volatility”