Outcome-oriented Strategy

The Future World philosophy encapsulates how we view our responsibilities as a large asset manager and a steward of our clients’ investments, by considering environmental, social and governance (ESG) factors. It incorporates how we engage with companies, develop innovative products, evolve our investment process and manage risk to deliver sustainable long-term value.

The fund aims to generate long-term capital growth by investing in equity securities on a global basis, including emerging markets. The fund aims to outperform its benchmark by 3% per annum, gross of fees, over rolling three-year periods.

An actively managed, concentrated global equity fund for investors seeking capital appreciation through stock selection.

The high-conviction approach offers global exposure to companies benefiting from the long-term global changes to society.
We aim to achieve financial success while investing in the future, by comprehensively incorporating environmental, social and governance (ESG) factors and actively engaging with company management.

Real Income Builder is the first product to be offered by the Global Equity team and is an outcome-oriented, actively managed strategy. Originally designed for defined contribution (DC) pension schemes, the objectives and characteristics of the strategy make it potentially relevant to most long-term investors, including defined benefit (DB) pension schemes, private wealth, foundations and sovereign wealth funds.

Real Income Builder is a strategy constructed from the bottom up, ie from a targeted selection of shares and bonds. It is designed to be appropriate as a standalone default option within DC schemes, but it also complements other outcome orientated funds with top-down investment styles.

Real Income Builder is priced to make it accessible to all investors, including those constrained by the charge cap for DC pension schemes.

Relevant for saving and retirement

The purpose of DC pension saving is to provide the investor with an income in retirement. If that income does not grow in line with inflation, (if it’s not ‘Real Income’), then its spending power risks being significantly eroded over time. The DC saver bears a lot of the responsibility for retirement planning on their own shoulders. If they cannot see and understand their pension’s ‘Real Income’ potential while they are still working, there is a risk they don’t make the right retirement planning decisions before it is too late.

The Real Income Builder is designed to help the saver with these challenges by:

  • Generating and reporting the natural income of their savings. Natural income is income produced without selling fund units or assets.
  • Aiming to grow the natural income that their savings generate by 4% above inflation if the DC saver reinvests that income in the strategy, eg during accumulation/growth.
  • Aiming to grow the natural income that their savings generate in line with inflation if the individual withdraws the income, eg during retirement.

The targets to grow income are measured and reported over three year rolling periods.

Diagram of Real Income Builder

Importance of growing real income above inflation

The impact of annual inflation compounds dramatically over time. Assuming inflation of just 2% per annum, the spending power of £10,000 will be eroded to the equivalent of just £6,676 over 20 years. Real Income Builder aims to protect income against the effects of inflation and targets, during accumulation, to grow income by 4% above inflation each year. So, when the investor takes their income in retirement, Real Income Builder could turn £10,000 into the equivalent of £21,911 in spending power over the same time.

Risks

The value of a Fund can fall as well as rise, and is not guaranteed. Other risks such as credit, issuance, liquidity and counter party risks may also be involved. No guarantee can be given that the Fund will achieve its objective, if any. Changes in exchange rates may have an adverse effect on the value price or income of the Fund. Performance indications do not consider charges levied at subscription and/or redemption. Past performance is not a reliable guide to future performance.

Tax treatment of the subscription, holding and redemption of shares in the Fund depends on individual circumstances and may be subject to change. For information about the risk factors relevant to the Fund, investors are invited to consult the prospectus and the key investor information document. Investors are invited to read the prospectus and the KIID before subscribing to the shares in the Fund. These documents are available on this website.

Global Equity team

Find out more about the team that manages our Global Equity strategy.

View Global Equity team here