Harbour Asset Management has rolled out a new multi-asset, multi-manager fund targeting a cash plus 5 per cent return.
The Harbour Active Growth Fund – the Wellington-headquartered firm’s 12th product – can invest into an underlying menu of six external managers (as well as in-house capabilities) covering eight asset classes.
Chris Di Leva, who joined Harbour last year from Mercer NZ as a multi-asset specialist, takes on portfolio management duties for the new fund with the investment team also including Andrew Bascand, managing director, and head of fixed income, Mark Brown.
Di Leva is chair of the Harbour asset allocation committee and already manages several bespoke multi-asset portfolios.
A Harbour spokesperson said the manager created the Active Growth fund to meet a “growing client demand for a multi-asset offering”.
The strategy taps into “some of the same research and processes as the Harbour Income Fund, but is designed for a slightly higher risk and return tolerance”, the spokesperson said.
“It is designed as a standalone diversified fund, but can also be mixed with other funds to add diversity to an investors overall portfolio.
“We think the fund will also appeal to financial advisers and investors looking for a globally diversified active investment exposure.”
Di Leva said the Active Growth strategy had triggered a good response from investors, garnering about $10 million of committed capital already.
“Looking ahead it’s going to be more difficult to get returns from listed markets,” he said. “We think you need an active approach to manager selection and asset allocation if you’re worried about future expected returns.”
While Harbour’s in-house investment team will handle most of the Australasian equity and fixed income asset classes, the Active Growth fund can also allocate to a stable of external managers including: T Rowe Price (Harbour’s global equities partner since 2014); Baille Gifford for international small companies; First Sentier Investments (formerly First State) for global listed infrastructure; international fixed income specialists Western Asset Management; Australasian credit manager, Realm Investment House; and, another international fixed income option from AB – the global investment powerhouse previously known as AllianceBernstein.
The core Harbour team emerged out of the local AllianceBernstein operations in 2010 after the US-based manager closed up shop in NZ.
Di Leva said both AB and Realm (which Harbour uses in its fixed income strategy) would remain on the bench for now.
“We’re not allocating to all the managers straight away,” he said. “And we’ll probably add a couple others over time.”
The fund would switch between underlying funds as required while employing tactical asset allocation based on internal resources (Di Leva and recent analyst hire, Hamish Pepper) as well as a panel of independent global researchers.
Di Leva said the Active Growth strategy had a flexible asset allocation mandate but over the long term it should invest about 70 per cent in equities.
Since inception in 2010, Harbour has accumulated about $5 billion in funds under management. Over the last 12 months the manager has launched three new products: a real estate fund in October 2018; an Australasian equities long-short product this January; and, the new multi-asset strategy.
The multi-asset fund, which carries an annual management fee of 0.95 per cent, benchmarks to a weighted composite of underlying asset class indices.
However, the fund has a target return of the NZ official cash rate plus 5 per cent on a rolling five-year basis along with annual distributions of 5 per cent (paid quarterly).
Di Leva said the return “objectives” provide a useful reference point for retail investors who may not have a grasp of the nuances of asset allocation.