Alternative investment manager RM Funds has launched a highly defensive fund strategy in anticipation that the economic environment will worsen and become more uncertain with increasing macro headwinds and market volatility.
The fund – VT RM Alternative Income Fund (RMAI), an actively managed open-ended fund investing in defensive, income producing alternative assets – is the first of its kind and is designed to invest in income producing listed equities and bonds with limited correlation to wider equity markets, across infrastructure, specialist real estate and direct lending.
The Ucits V fund, which targets 5% annual income distribution, offers investors a diversified and defensive portfolio of alternative, predominantly listed, income producing assets.
The highly diversified portfolio will invest in securities across specialist real estate, alternative lending and infrastructure.
With a focus on capital preservation and income generation, the fund offers investors interest rate and inflation protection in a low yield and rising interest rate environment. The fund will select investments with low correlation to the wider equity and fixed income markets. Investments are underpinned by contracted cash flows and tangible assets.
Pietro Nicholls, investment manager of RM Funds, said: “The fund is designed to be a single investment that offers investors and asset allocators exposure to an actively managed diverse portfolio of alternative income-producing assets which traditionally have been seen as defensive, less volatile and uncorrelated with the wider equity and fixed income markets to generate reliable and stable income well insulated from increases in market volatility and macro-economic conditions.”
Nicholls said he hoped the VT RM Alternative Income would offer investors stable income, with reliable returns and downside risk protection from low yields, the rising interest rate environment, increasing economic uncertainty and Brexit.
The fund, available on most investment platforms with all fund charges capped at 0.85%.