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Threadneedle (Lux) Euro Dynamic Real Return Fund
A long-only, dynamically managed multi-asset fund that targets a positive real return of 4% above EU inflation (CPI)
“With the Euro Dynamic Real Return Fund, our goal is to deliver consistent performance, even in times of market volatility. Rather than constrain our opportunity set, each position needs to earn its way into the portfolio from a return and risk perspective. Having the ability to rebalance our portfolio actively is key to navigating the current environment and ultimately delivering a smoother overall investment ride.”
– Maya Bhandari
– Maya Bhandari
Fund Description
An unconstrained, unlevered active asset allocation fund that targets a positive real return above European inflation (CPI) over the medium to long term.¹ The portfolio manager has the flexibility to invest directly in securities, with additional allocation to internally-managed funds and passive strategies. The investment team has full look-through to all portfolio positions which facilitates robust risk management.
Dynamic asset allocation
The fund is able to take advantage of a wide range of investment opportunities as they present themselves thanks to its unconstrained approach, with no benchmark restrictions. There is ‘no neutral’ and as active investors we can invest across a range of asset classes to source the very best ideas for the portfolio.
¹European Inflation (CPI) is defined as the Monetary Union index of consumer prices (MUICP). Please note that the performance target may not be attained. The performance target is gross of fees and over a 3-5 year investment horizon.
Key Facts
- Fund launch date
24 April 2018 - Asset class weightings
Equities: 0-75%
Fixed income and cash: 0-100%
Commodities: 0-20%
Alternatives: 0-10% - Holdings
The portfolio invests in direct investments, derivatives, passive strategies and in-house funds
Investment Approach
We seek to achieve the fund’s performance objective by dynamically changing the portfolio risk budget; we are able to select from regional equity, fixed income and commodity market exposure where appropriate, but, importantly, the portfolio can also be zero-weighted in any asset class. There is no ‘neutral’ allocation, so every investment position is a risk position. The typical average holding period is 12-18 months, although the actual holding period can vary depending on our investment outlook.
The Asset Allocation Strategy Group uses the output from three proprietary research groups to formulate its macroeconomic and thematic views, and defines the investment environment used to build asset allocation portfolios. This is combined with a valuation framework across all asset classes, and is used by the group to determine its preferred asset allocation and risk preferences. We manage this strategy using a three stage approach, which is outlined in the chart below:
Proven and repeatable investment process
Fund Manager
James Coke
Head of Institutional UK Real Estate
James Coke, MRICS, is Fund Manager of the Threadneedle Property Unit Trust, responsible for fund strategy and performance, including delivering the fund’s financial and environmental KPIs. James also acts as Fund Director on two institutional client mandates, having onboarded these in 2020 and 2023. In his role as Co-Head of Institutional UK Real Estate, James is responsible for ensuring the UK Real Estate business continues to grow and diversify its institutional client offering. James is a member of the Property Business Management Team and the ESG Steering Group.
James joined Columbia Threadneedle Investments in 2013, initially in an investment role, where he was responsible for over 300 investment transactions totalling over £2.4 billion. Before joining the company, James worked at JLL, advising clients on property acquisitions and disposals throughout the UK. James is a qualified member of the Royal Institution of Chartered Surveyors (MRICS). He graduated with a BSc (Hons) in Land Management from the University of Reading in 2006.
Insights
22 May 2020
Multi-Asset
Asset Allocation Update - May 2020
Asset Allocation Update - May 2020
Global economic activity has suffered a “sudden stop” as authorities have sought to contain the spread of the Covid-19 virus by shutting down economies.
Read time - 5 min
Key Risks
Past performance is not a guide to future returns and the fund may not achieve its investment objective. Positive returns are not guaranteed on this fund and no form of capital guarantee applies. The value of the fund may fluctuate in response to the performance of individual securities and general market conditions and investors may not get back the sum originally invested. Fluctuations in exchange rates may also cause the value of investments to rise or fall. The investment policy of the fund allows it to invest materially in derivatives. The fund invests in securities whose value would be significantly affected if the issuer either refused to pay or was unable to pay or perceived to be unable to pay. By investing in fixed income securities, the fund’s value can be impacted by changes in interest rates. The fund invests in other funds, therefore the risks in these other funds should be considered. The fund’s assets may sometimes be difficult to value objectively and the actual value may not be recognised until assets are sold. The fund may exhibit significant price volatility. Please read the Key Investor Information Document and the Fund Prospectus if considering investing.
Important Information
For use by professional clients and/or equivalent investor types in your jurisdiction (not to be used with or passed on to retail clients). For marketing purposes.
Past performance is not a guide to future performance.The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Your capital is at risk. This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services.
Threadneedle (Lux) is an investment company with variable capital (Société d’investissement à capital variable, or “SICAV”) formed under the laws of the Grand Duchy of Luxembourg. The SICAV issues, redeems and exchanges shares of different classes. The management company of the SICAV is Threadneedle Management Luxembourg S.A. Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest annual or interim reports and the applicable terms & conditions. Please refer to the ‘Risk Factors’ section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. Documents other than KIIDs are available in English, French, German, Italian, Spanish and Dutch (no Dutch Prospectus). KIIDs are available in local languages. The summary of investor rights is available on our website in English. Documents can be obtained free of charge on request by writing to the management company at 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg, from International Financial Data Services (Luxembourg) S.A. at 47, avenue John F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, and /or from www.columbiathreadneedle.com. Threadneedle Management Luxembourg S.A. may decide to terminate the arrangements made for the marketing of the Fund. The mention of any specific shares or bonds should not be taken as a recommendation to deal. The analysis included in this webpage has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.
Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Société (Luxembourg), Registered No. B 11024, 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.
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