The aim of the fund is to deliver returns of inflation (CPI) plus 2% over a rolling three-year period, net of fees. Most ‘real’ return funds target cash plus x%; this fund focuses on inflation as they believe this is a more important measure and in the long term will be achievable.
The fund is run with an absolute fund mindset, with the aim to minimise any potential negative returns. The aim is to have volatility around 50% of world equities but the sensitivity to equities is more important. This is at around 20%; if markets fall by 10% they would expect to be down around 2%. We talked about when the fund might not perform, and their view is that it should work in most markets….read more