MainFirst Absolute Return Multi Asset - Video with Adrian Daniel


Transcription of the Video:

Ladies and gentlemen, hello and a warm welcome to you. Multi-asset funds are very much in demand among investors ‒ something Adrian Daniel, Portfolio Manager of the MainFirst Absolute Return Multi Asset, is very well aware of. This year he achieved a performance of 11% for the fund in the first seven months, resulting in a three-year performance of 22%. Adrian, thanks for being here today to answer a few questions about the fund for investors. Let’s kick off with performance. It certainly sounds good. Are you satisfied with it?

Yes. I’m quite content with the way the fund has performed. When the fund was launched in 2013 we set ourselves the target of achieving an absolute return of 5% per year. And that while assuming a moderate level of risk. So far we’ve achieved that, and we’ve done it despite the fact that the interest rate landscape here in the eurozone has since become more difficult.

Yes, you mean the period of low interest rates we’ve now had for five, six, or seven years. Do you think it’ll be over one day?

Unfortunately I think low interest rates will be with us for a while yet. I believe there are structural reasons that are likely to make it difficult for the central bank to bring about interest rate normalisation any time soon. They include demographics and the piles of debt that, at the end of the day, will have a dampening effect on growth and inflation.

You touched upon the problems in the market, but there’s a lot more to it. How do you actually deal with them? Can you describe briefly how the investment process in your fund works?

Within the fund we concentrate on picking individual stocks based on investment themes with structural growth. These investment themes include the shift in consumption to e-commerce, e-mobility and the automation of manufacturing. But these investment themes often have a significantly more sustained impact on the normal ups and downs of the economy, which in simple terms gives us considerably greater visibility when it comes to investing.

On the other hand, we have risks as well as opportunities. How do you manage them?

Our risk management is based on technical analysis. In our experience, technical analysis is significantly more effective at forecasting short-term trend reversals on stock markets than, for example, fundamentals such as labour market data or leading indicators. Accordingly, we have assembled a package of different technical indicators in order to minimise or limit the fund’s volatility.

The equity allocation in your fund currently stands at 44%. What kind of percentage is that? High? Low? And how flexible are you when it comes to portfolio composition?

As I mentioned earlier, the fund’s aim is to achieve an absolute return. That means we’re not subject to a minimum allocation for a specific asset class, for example, and need to be able to act in a totally agile manner. As for equities, you rightly identified that at 44% we are situated towards the upper end of the envisaged bandwidth of 0-50%. Right now, we’re very optimistic about that.

Finally, Adrian, could you please sum up the most important features of your multi-asset fund?

Within the fund concept we put the emphasis on sustainable investment themes for performance generation. These often have a significantly more sustained effect and thus should also be able to achieve an absolute return in the long term. Second, the fund includes risk diversification; in the past, this has enabled it to produce appropriate volatility leading to an asymmetric risk/reward profile. In this era of low interest rates, the result is an alternative to bond markets for conservative investors with a focus on absolute return. What’s more, I’m proud to say it was recently given an unbiased 5-star rating by the Morningstar agency.

Well, thanks for talking to us Adrian, and all the best for the future.

Thank you.