Before diving into the update with the manager it is worth reflecting on the performance. For us this fund is seen as an alternative or blend with bonds. The aim being to have bond like volatility with equity type returns. The best measure of performance for us is bonds and although the fund appears to be behind in terms of performance it has volatility of just 4.27% over three years compared to 7.11% with the bond benchmark. Effectively delivering positive returns with lower volatility.
The fund has been tested three times in August 2015, January 2016 and June 2016. Below is how the fund performed vs the benchmark:
|1 Aug 2015 – 31 Dec 2015||1 Jan – 23 June 2016||24 June 2016 – 31 Aug 2016|
|Threadneedle Dynamic Real Return Fund||-0.30%||0.96%||6.28%|
|50/50 iShares Core UK Gilts/Core £ Corporate Bond||-0.23%||5.86%||11.34%|
Taking this a step further the stated aim of the fund is to achieve a return of inflation plus 4% over a three-year time frame which the fund has achieved. Toby explained that the idea of the fund is to follow an active allocation strategy.