Old Mutual Global Investors enhances multi-asset proposition


Old Mutual Global Investors (OMGI), part of Old Mutual Wealth, has today announced it intends to relaunch the Old Mutual Spectrum Funds as the Old Mutual Creation Portfolios in July 2017.

The enhancements will provide the portfolio manager, Anthony Gillham, with greater flexibility and additional tools with which to deliver the portfolios’ investment objectives. Indeed, we believe that the risk-targeted portfolios will be able to achieve more consistent investment returns over the medium to long term. Further, clients will see a reduction in fees and the option to invest in a portfolio at the higher end of the risk appetite scale.  

The Old Mutual Creation portfolios have been designed based on research conducted with the business’s clients on the portfolio characteristics most valuable to them. They are aligned with client requests for outcome-orientated solutions that aim to generate returns commensurate with a level of risk with which they feel comfortable. OMGI has also sought guidance from financial advisers and ratings agencies to provide a further level of insight into client requirements, with the Old Mutual Creation portfolios tested with end clients to ensure compatibility with these demands.

The development of the Old Mutual Creation Portfolios forms part of an evolution of the business’s multi-asset range that has been underway since the Old Mutual Wealth multi-asset unit was created in October 2015.

The Old Mutual Wealth multi-asset unit product suite is truly client-centric, offering both unitised portfolios and managed portfolio services. The range has been designed to ensure there are solutions available to suit investors with different investment preferences and attitudes to risk. The ongoing evolution of the range has already resulted in the re-launch of OMGI’s decumulation product, the Old Mutual Generation Portfolios, in October 2015 and the launch of its flagship international offering, the Old Mutual Compass Portfolios, in April 2016.

Anthony Gillham, co-investment director, Old Mutual Wealth multi-asset unit:

“Our multi-asset range has been designed to meet investor demand for genuinely diversified solutions that provide consistent returns and manage downside risk.

“We have a long history of innovation, research and the building of multi-asset portfolios designed to meet the needs of a range of clients with different investment preferences. In pursuit of our aim to offer a varied suite of solutions that meets investor needs, we have worked closely with our clients and financial advisers to ensure our multi-asset range is aligned with investor expectations. We are excited to unveil the Old Mutual Creation Portfolios, believing this change will not only benefit existing clients, but also enhance and simplify our entire suite of multi-asset accumulation solutions.

“We’re proud that our multi-asset range now stands as one of the most client-focused offerings in the market. We believe it has the potential to deliver positive long-term outcomes for investors at various stages of their investment journey.”

As of 1 July 2017, the following will take effect:

  • Name -the Old Mutual Spectrum Funds will be renamed as the Old Mutual Creation Portfolios. This name reflects the development of the range and its utility as a solution for accumulation.

Going forward the portfolios will be called:

Current

New Name

Old Mutual Spectrum 3

Old Mutual Creation Conservative Portfolio 

 

Old Mutual Spectrum 4

Old Mutual Creation Balanced Portfolio

 

Old Mutual Spectrum 6

Old Mutual Creation Moderate Portfolio 

 

Old Mutual Spectrum 7

Old Mutual Creation Dynamic Portfolio 

  • Investment objective – the investment objective of each portfolio will be amended to clarify that they target capital growth over the long term to a maximum volatility level. 

  • Investment policy - the portfolios will continue to target capital growth. However, OMGI is going to expand the investment and risk tools available to provide the portfolio manager with greater flexibility with which to achieve the investment objective of each portfolio. The detail of which is as follows:

-Widen the range of possible exposure to directly invested equity and fixed income holdings.

-Remove the constraint that the portfolios be predominantly invested in other collective investment schemes and allow OMGI more flexibility to invest in a wider range of instruments, such as directly held equities. 

-Extend the use of derivatives for investment purposes as well as for efficient portfolio management.

-Concentrate investments in collective schemes to a select group of third party investment manager partners and the best OMGI funds. The third party investment manager partners are chosen following a rigorous research process based on the partners having a strong competitive edge in their respective asset class or market and their ability to offer value for money.

  • Fees – a fixed ongoing charge pricing structure will be introduced, replacing the existing combined fees and costs of the annual management charge, the administrative costs and the ongoing costs of investing in other collective investment schemes. This will provide greater certainty to clients over the ongoing costs associated with investing in the portfolios.

The fixed ongoing charge will be lower than the current OCF.

  • Fund mergers - a review of the portfolio range highlighted the similar investment objectives, investment policies and risk profiles shared by Old Mutual Spectrum 5 and Old Mutual Spectrum 6; and Old Mutual Spectrum 7 and Old Mutual Spectrum 8.

As such, on 7 July 2017, subject to shareholder approval, Old Mutual Spectrum 5 will merge into Old Mutual Creation Moderate (previously Spectrum 6) and Old Mutual Spectrum 8 will merge into Old Mutual Creation Dynamic (previously Spectrum 7).

  • New portfolios - a new portfolio, the Old Mutual Creation Adventurous Portfolio, will be launched, available for clients identified to be at the higher end of the risk appetite scale. This portfolio will launch on 3 July 2017.

The changes announced are not expected to alter the portfolios’ risk profiles.

The Old Mutual Creation Portfolios will be managed by Ant Gillham, supported by the significant depth and breadth of talent in the multi-asset unit.  The management team will continue to make strategic and tactical asset allocation decisions on a daily basis.