Every month we study the universe of funds in the investment marketplace to assess whether they meet our exacting standards and should be given the RSMR seal of approval.
This fund is part of Schroders' range of Income Maximiser funds which are equity funds aiming to consistently deliver a relatively high level of income. The objective of this fund is to deliver an income of 5% per year. There are two sources of income: the natural income from the underlying portfolio and a covered call option strategy, designed to boost the income.
The fund’s investment strategy will typically underperform a similar portfolio of equities without a derivative overlay in periods when the underlying equity prices are rising and has the potential to outperform when the underlying equity prices are falling. Schroder has established a significant presence in the OTC covered call options market over the past 14-years and the Income Maximiser strategies have been tested across several market cycles. The underlying portfolio aims to have a minimal tracking error relative to the US large cap market. The fund is a good option for income investors seeking some exposure to US equities.
The VT Gravis Clean Energy Income fund aims to provide exposure to companies engaged in the provision of clean energy, energy efficiency, and related themes with a focus on long-dated visible cash flows derived from energy infrastructure assets. The strategy has an objective to deliver 4.5% net yield, as well as capital preservation in real terms and modest capital growth.
The portfolio invests in a universe comprising securities listed in the Organisation for Economic Co-operation and Development (OECD), nations that focus on clean and renewable energy projects. This will include solar, wind, hydro, energy storage, energy efficiency, bioenergy, smart grid and geothermal pumps. The focus for investment is mature technologies with established track records that have attractive long-term dependable cash flows. Positions must be income-generative with the potential for capital growth to be included.
This is a global fund providing investors with exposure to a growing sector supported by long-dated, reliable cash flows that in some cases provide inflation protection. The fund offers investors exposure to a growing sector while providing a diversified source of income within a portfolio. Clean technology is at the forefront of many nations’ agendas, especially post the Covid-19 pandemic, and is set to grow in the coming years.
Due to the underlying themes that the fund invests in, many controversial sectors are naturally omitted. However, the fund is managed to adhere to a Responsible Investment Statement that clarifies this position.
The Fulcrum Core Diversified Absolute Return Fund looks to deliver returns in an uncorrelated manner to equity and bond markets. Its return objective is inflation plus 3-5% gross over rolling 5 year periods. It is managed in a dynamic way with active asset allocation utilising liquid asset classes by a team that are specialists in global macro absolute return investing. These incorporate both directional and relative value strategies with 20-30 uncorrelated views. The fund has the potential to deliver positive risk adjusted returns in all conditions but may appear dull when conventional financial assets perform strongly. The fund is competitively priced in its sector with no performance fees.