The Threadneedle (Lux) Global Multi Asset Income Fund (the “Fund”) of Columbia Threadneedle Investments celebrates its fifth anniversary. It generated a return exceeding 5% each year1 supplemented by an annualized return of 6.6% over 5 years1 (as of December 31, 2019). In 2019, the Fund generated total capital growth of 16.3% 1, making it its best year to date.
Under the leadership of portfolio manager Maya Bhandari since 2015, the Fund aims to generate an annual return of 5% from three diversified sources, namely stocks, bonds and the sale of call options on index, in a context of controlled volatility in order to preserve the capital of clients in the medium term.
Felicity Long, Client Portfolio Manager, Multi Asset at Columbia Threadneedle: “Investors have always needed high-income investments, whether to finance the education of their children or to earn a return during their retirement. However, in a world with extremely low interest rates, it is necessary to think outside the box to identify a source of robust and sustainable return. “
“A quick look at the different asset classes is a good illustration of the challenge that many investors face. Equities are volatile in nature, as the market correction at the end of 2018 reminded us. Bonds offer historically low yields. Against this backdrop, the government bonds of the main economies show prospects for sluggish risk-adjusted returns, as well as low income potential. “
“In addition, given the uncertainty in the markets, investors must therefore look to other alternatives to obtain an attractive level of income, while avoiding the volatility associated with equities. Our income-oriented multi-asset fund seeks to generate quality and sustainable income, even in the low-yielding world we know today. “
Maya Bhandari, Manager of the Threadneedle (Lux) Global Multi Asset Income Fund: “We have had to contend with an often testing environment for income over the five years of the fund’s existence, and it is encouraging to see that our disciplined approach to asset allocation and income generation has paid off during this period. Both in relation to its objective and vis-à-vis its peer group, the fund has achieved a good journey since its launch. “
“There are several reasons today for cautious optimism. Threats to global trade and a harder Brexit are considerably less present than they were, even in mid-December. Both our and the consensus forecasts anticipate near ideal economic growth: not strong enough to require an increase in interest rates, nor weak enough to rekindle fears of recession. Stocks and corporate bonds are expected to fare well in this environment, with decent profits and dividend growth. “
“By exploiting our ideas that generate returns and by remaining cautious in the event of threats, we are well positioned to meet the return needs of investors, with controlled volatility. It is encouraging to see that over the life of the fund, our three sources of return – stocks, bonds and covered call options – contributed the same amount to returns. In addition to allocation, the skills of our Global Equity Income and Corporate Credit teams ensure one of the best stock selections in the market for our investors. “
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