The fund aims to provide positive total returns (the combination of income and capital growth) over any three-year period from a flexibly managed portfolio of assets invested around the world. There is no guarantee that the fund will achieve a positive return over any period, and you may not get back the amount you originally invested.
Investment policy and strategy
Core investment: The fund is typically invested in a mix of assets, including bonds, company shares and currencies.
The fund typically invests in assets indirectly via derivatives. It may also invest in assets directly or through other funds. The use of derivatives allows the fund manager to carry out trading strategies that seek to profit from falls in asset prices. It also allows the fund to gain exposure to investments exceeding the value of the fund in order to increase potential returns in both rising and falling markets. In addition, derivatives are used to reduce risk and costs and to manage the impact of changes in currency exchange rates on the fund’s investments.
Other investments: The fund also invests in convertibles and property-related securities. It may also hold cash, warrants and money market instruments (for example, debt due to be repaid within a year).
Strategy in brief: The fund is managed with a highly flexible investment approach. The fund manager has the freedom to allocate capital between different types of assets in response to changes in economic conditions and asset prices. The approach combines in-depth research to work out the ‘fair’ value of assets over the medium to long term, with analysis of the market’s short-term reactions to events, to identify investment opportunities. The fund seeks to manage risk by investing globally across multiple asset classes, sectors, currencies and countries. Where the manager believes opportunities are limited to a few areas, the fund may be very concentrated in certain assets or markets.
Bonds: Loans to governments and companies that pay interest.
Convertibles: Bonds issued by companies that usually pay a set rate of interest and which can be exchanged for predetermined amounts of company shares.
Derivatives: Financial contracts whose value is derived from other assets.
Warrants: Financial contracts which allow the fund manager to buy stocks for a fixed price until a certain date.
Risks associated with the fund
The value of investments and the income from them will rise and fall. This will cause
the fund price, as well as any income paid by the fund, to fall as well as rise. There
is no guarantee the fund will achieve its objective, and you may not get back the
amount you originally invested.
The fund may use derivatives with the aim of profiting from a rise or a fall in the
value of an asset (for example, a company’s bonds). However, if the asset’s value
varies in a different manner, the fund may incur a loss.
If the share class is hedged (H share class), it aims to mirror the performance of another share class. We cannot guarantee that the hedging objective will be achieved. The hedging strategy will limit holders of the hedged share class from benefiting if the hedged share class currency falls against the euro.
From time to time the fund may be highly concentrated in one or a few investment
strategies, which could result in large price rises and falls.
The fund will invest in emerging markets which are generally smaller, more sensitive
to economic and political factors, and where investments are less easily bought and
sold. In exceptional circumstances, the fund may encounter difficulties when selling
or collecting income from these investments, which could cause the fund to incur a
loss. In extreme circumstances, it could lead to the temporary suspension of dealing
in shares in the fund.
Where market conditions make it hard to sell the fund’s investments at a fair price
to meet customers’ sale requests, we may temporarily suspend dealing in the fund’s
Some transactions the fund makes, such as placing cash on deposit, require the
use of other financial institutions (for example, banks). If one of these institutions
defaults on their obligations or becomes insolvent, the fund may incur a loss.
The Fund allows for the extensive use of derivatives.