The Schroder Real Return Fund has taken out this year’s Asset Allocator of the Year award as part of the 2012 Money Management/Lonsec Fund Manager of the Year awards.
The fund specifically targets a rate of return above inflation of 5 per cent.
“That is the thing that we focus on delivering, and we focus on delivering it in the least risk way we can,” said Simon Doyle, head of fixed income and multi-asset at Schroders.
Research house Lonsec praised the fund’s flexible approach to asset allocation, which proved particularly effective in 2011 with the fund significantly outperforming traditional growth style funds.
“The fund returned 3.9 per cent over the 12 months to December 2011, versus the Morningstar Multi-Sector Growth Index return of -4.1 per cent,” Lonsec said.
Portfolio managers Doyle and Simon Stevenson – who have a proven track record in asset allocation and portfolio construction – are held in high regard by Lonsec.
“[Stevenson] and I work very closely together on the strategy and that gives it a robustness that seems to be supported by the individual investors of the underlying strategies that we invest in,” Doyle said.
Doyle and his team see valuation as a very important element of their process.
“The difference of our approach to the standard approach that most people take is that we don’t have any bias to any particular asset class,” he said.
“We will own equities, but only if equities make sense to own, we’ll own fixed income if it makes sense to own fixed income, and if it doesn’t make sense to own any asset because there’s no risk premium available to us – the investor – we’re happy to sit in cash.”
It is important to the strong capability in both asset allocation and underlying assets that you invest in.
“We’ve been very fortunate here at Schroders over the last four or five years to have made pretty good asset allocation decisions, but also to have a capable group of investors sitting behind the desk and making the stock selection decisions,” Doyle added.
Also making the shortlist for Asset Allocator of the Year were Mercer Growth Fund Plus and Perpetual's Wholesale Balanced Growth Fund.
Mercer leverages off its large global resources, but senior partner Simon Eagleton said the team prides itself in staying true to diversification.
“Coming out of the financial crisis, I think many investors (us included) took the opportunity to examine why many of the then “diversified” strategies weren’t indeed as diversified as people thought,” Eagleton said.
Apart from winning the overall Fund Manager of the Year and Asset Allocator of the Year awards, Schroders took the trophy in two other categories.
