Allianz to launch diversified growth fund
Jennifer Lowe, 25 January 2010
Allianz Global Investors has revealed details of its RCM Dynamic Growth Fund which aims to offer investors equity-like returns with a lower level of volatility.
The fund, which is pending investor approval, also seeks positive real returns over a market cycle and genuine downside protection in times of market stress.
Managed by RCM Systematic, a specialist asset management team based in Frankfurt, the fund will gain exposure to a broad mix of asset classes through investing in exchange-traded funds (ETFs).
The fund may also invest in other instruments including collective investment schemes, equities, fixed income securities, money market instruments, cash and derivatives such as index based total return swaps, equity based total return swaps and currency forward contracts.
Additionally the team will employ tactical asset allocation, which not only assesses the macro-economic environment, business cycle, and market technicals, but also draws on the research and resources of RCM’s global investment platform.
While diversification, strategic and tactical asset allocation will provide a degree of downside protection, a sophisticated total return risk management module aims to enhance this protection further by limiting downside risks.
Herold Rohweder, Global Chief Investment Officer for RCM Systematic, said, ‘We believe the new strategy is a “second generation” diversified growth fund, in not just relying on diversification to deliver an attractive risk reward profile, but rather adds both dynamic and tactical asset allocation and sophisticated risk management.
‘In the process of developing the fund, we have tested the strategy through a variety of different market phases. This work has demonstrated that it is possible to achieve a risk/return profile that lowers the volatility of overall expected returns, offers true downside protection, while generating higher expected returns.’
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