AVIVA INVESTORS MULTI-STRATEGY TARGET RETURN FUND
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AVIVA INVESTORS
MULTI-STRATEGY
TARGET RETURN FUND
AN OUTCOME-FOCUSED STRATEGY
FOR AN UNCERTAIN WORLD
This document is for wholesale clients only. It is not to be viewed by, or used
with, retail clients.
avivainvestors.com.au
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The Aviva Investors Multi-Strategy (AIMS) Target
Return Fund1:
– targets annual investment performance of returning
5% above the Reserve Bank of Australia (RBA) cash
rate.
– draws on the best ideas from Aviva Investors’ global
investment teams.
– aims to deliver positive returns throughout the
market cycle with half the volatility of global
equities over any three-year period.
– seeks to help schemes diversify their portfolios with
an outcome-oriented approach generating returns
that have little correlation to equities, bonds and
other traditional asset classes.
Multi-strategy investing
Investing in an uncertain world Why multi-strategy investments Markets are not efficient – markets are
Investment strategies designed to deliver Our Aviva Investors Multi-Strategy (AIMS) quick to embed information but not always
specific returns regardless of the market fund range aims to provide trustees with the correct information, potentially leading
environment have proven popular with specific returns linked to the RBA cash rate to large swings in sentiment.
a wide array of institutional investors in with half the volatility of global equities. As
recent years. Their popularity lies in their such it is designed to meet many trustees’ Markets are more focused on the short
ability to generate relatively stable returns needs for equity-like returns with limited term than the medium-to-long term –
that are uncorrelated to other asset prices. volatility, irrespective of market conditions. fund managers who can ignore short-term
That in turn, we believe, has made them an market events and investment opportunities
attractive option for pension schemes as they Drawing on the best investment ideas from should be better placed to spot mispriced
look to reduce deficits and fund the costs across our business, each of the funds in the medium-term opportunities. So, more
of hedging out their liabilities. AIMS offering manages risk for clients by investment ideas with attractive risk-adjusted
combining a diverse range of strategies. The returns should be found over a three-year
Furthermore, while aggressive and funds’ performance has little correlation investment period than any other period.
experimental monetary policy has in recent to equities, bonds and other traditional
years meant most financial markets have asset classes, so they can help improve the Investment opportunities are not always
done well, there is no guarantee this will risk-adjusted performance of a traditional found in traditional asset classes – our
continue. Investors could be in for a bumpy multi-asset portfolio. investment ideas aim to identify why and
ride when US interest rates eventually start how the market misprices risk. In managing
to rise. And, it is during periods of market The AIMS investment philosophy risk for clients, more often than not we
stress that the links and correlations between The following three beliefs underpin how employ strategies that allow us to express
assets will become clear. With so much our investment process, and the way a view within an asset class or on how the
uncertainty remaining demand for these we construct AIMS funds is designed outlook for one compares relative to the
types of investments looks like it could be set to deliver the outcomes clients need. outlook for another.
to grow.
1. The AIMS Target Return Fund operates as a ‘feeder’ fund of the Aviva Investors Multi-Strategy Target Return Fund, a sub-fund of Aviva Investors SICAV (Underlying Fund).
08285 Aviva Investors Brochure_30Apr_v10.indd 4 30/4/15 12:17 PM
AIMS Target Return Fund
An outcome-driven solution designed for schemes looking for attractive long-term returns but with far
less volatility than typically associated with global equities. It actively blends many investment strategies in
unconstrained global portfolios.
Key fund facts
Underlying Fund managers Peter Fitzgerald, Ian Pizer and Dan James
Fund objective The fund aims to deliver a gross return of 5 per cent per annum above the RBA cash rate
(before charges) over rolling three-year periods, with a volatility of half that of global equities
over the same period.
Liquidity Daily; No redemption fee, no minimum holding period
Settlement (subscription) 3pm AEDT
Settlement (withdrawal) T2+21
Fund structure The fund3 will invest in the Australian Dollar Hedged ‘F’ Share Class of the Underlying Fund
Base currency AUD
Key benefits Key risks
Smoother returns – We aim to help pension No guarantee – The return and volatility aims of the
schemes manage funding levels more effectively fund are not guaranteed and clients may get back
by targeting long-term investment returns similar less than the original amount invested.
to traditional equity strategies but for much less
volatility and irrespective of market conditions. Investment time horizon consideration –
Investment may be subject to significant short-
Outcome-oriented solution – Experts in specialist term market fluctuations. The fund may not be
investment areas from across the business generate appropriate for those who plan to withdraw their
a wide range of return-seeking investment ideas that money within five years.
aim to produce positive returns in varied markets –
so we can aim to help schemes generate sufficient Market fluctuations – The value of the fund
returns to reduce funding deficits whilst lowering the is subject to market fluctuations. This could lead
overall volatility of their funding position. to values being adversely and unpredictably affected
by various factors including political and economic
Risk-diversified portfolio – By focusing on events. As such, the value of investments and the
diversifying portfolio risk rather than asset allocation, income from them may go down as well as up and
we aim to provide schemes with a specific your clients may receive less than the original
level of return unconstrained by benchmark amount invested.
considerations. This allows us to focus on providing
the long-term performance you need, even as market Derivative risk – The Underlying Fund can make
conditions change. significant use of derivatives with the aim of helping
it meet its return and volatility targets. As a result
Largely uncorrelated returns – The fund aims of the high degree of leverage typically employed
to help schemes diversify their portfolios with when trading financial derivatives, a relatively small
an approach that targets specific returns that price movement in the underlying asset may result in
have little correlation to equities, bonds and other substantial losses to the fund’s assets.
traditional asset classes.
Currency risk – Assets in which the Underlying Fund
Experienced team – The Underlying Fund’s invests are likely to be denominated in a currency
investment team has considerable expertise in other than the base portfolio currency (the Australian
running multi-strategy portfolios with a pedigree dollar). Changes in the exchange rate between the
stretching back over 30 years. assets and base portfolio currency may lead to a
depreciation of the value of the Fund. The Underlying
Fund Investment Manager may seek to mitigate
this by using financial instruments (for example, by
using hedging). The use of any such instruments are
intended to minimise the risk of loss due to a decline
in value of the hedged currency, but may also limit
any potential gain that might be realised should the
value of the hedged currency increase.
2. T: Within 10 business days of accepting withdrawal request
3. The fund is available for wholesale investors only. No investment should be made without considering the Product Disclosure Statement.
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COMMITMENT: Harnessing company-wide expertise
Aviva Investors’ Strategic Investment Group As chair of the Strategic Investment Group,
embodies the firm-wide commitment to the CEO Euan Munro acts as strategic advisor
Target Return Fund. It is the key forum for on the Fund and provides advice on portfolio
debates and judges the merits of the best construction based on his previous
investment ideas from around the business. experience of managing multi-strategy, target
return portfolios.
CREATIVITY: Capturing the investment performance you need
Idea generation is at the heart of our creative
approach to delivering the performance Japanese
equities
investors need in AIMS portfolios. The way European
strategies are expected to interact with each Emerging equities
other across a range of market conditions market bonds
Currency
is crucial to managing the fund to deliver positions:
the performance investors expect, whatever US dollar vs
Real estate Japanese yen
is happening in markets. We aim to select Market
a combination of strategies which together investment strategies
trusts
seek to maximise the chance of achieving our
objectives, while managing volatility. These
Opportunistic
strategies fall into three categories: market, strategies
opportunistic and risk reducing. Interest-rate
positions: Interest-rate
- Australian Risk-reducing
– Market strategies aim to generate positive strategies positions:
- South Korean European
investment performance if our House - Italian
View is correct.
– Opportunistic strategies aim to generate
positive performance irrespective of the Currency positions:
- US dollar vs Mexican peso
business cycle. - Sterling vs US dollar
– Risk-reducing strategies aim to generate
positive performance even when our
House View does not play out, especially
during periods of market stress.
CONSTRUCTION: A portfolio built to address the fear of uncertainty
We believe the way we construct portfolios This means we assess the expected risk and
is as important as generating good return of each strategy, the ease with which
investment ideas in managing portfolio a strategy can be exited and whether the
risk and delivering the performance strategy will work when the fund grows
clients expect. So, risk considerations are substantially in size. By blending strategies
at the heart of the process. We follow in the appropriate proportions, fund
a contribution-to-risk approach rather than managers aim to generate lower overall
a traditional asset-allocation approach. portfolio risk than the sum of the risks
of each individual strategy.
House View Idea evaluation Fund management
– Business-cycle analysis – Strategic Investment – Manage cash flows
– Market outlook Group deliberates, – Portfolio rebalancing
– Risk scenarios debates and decides – Manage liquidity
Idea generation Portfolio construction
– Market strategies – Position sizing
– Opportunistic strategies – Pre-trade risk
– Risk-reducing strategies – Stress testing
– Scenario analysis
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Why Aviva Investors
As a firm, we have considerable expertise in running multi-strategy portfolios, backed by a multi-asset pedigree stretching back over
30 years and an investment team managing over €96 billion in multi-asset strategies.4
Risk management is an integral part of our fund management process. All strategies must pass through a stringent pre-trade risk
process before being incorporated into the portfolio; this includes analysis of liquidity, scalability, suitability and the impact of the
strategy on the portfolio.
Members of the Portfolio Risk Team have a responsibility to critically interpret and translate the output of the various risk systems
to the portfolio managers rather than simply provide the figures and a ‘yes’ or ‘no’ sign off. We follow a risk factor rather than
an asset allocation limit approach, ensuring a truly diversified portfolio.
AIMS Target Return Fund Lead Portfolio Managers
Peter Fitzgerald
Head of Multi-assets
Peter manages the AIMS Target Return Fund and heads Aviva Investors’ multi-asset
investment team and is responsible for the company’s return-targeted multi-fund range,
managing a number of risk-targeted, unit-linked and pension portfolios.
Ian Pizer
Head of Investment Strategy Multi-assets
Ian manages the AIMS Target Return Fund; he joined Aviva Investors in November 2014
from Standard Life Investments, where he was Investment Director, Multi-Asset Investing
and managed its Global Absolute Return Strategies (GARS) fund.
Dan James
Global Head of Rates and Multi-Strategy Fixed Income
Dan manages the AIMS Target Return Fund and oversees management of developed and
emerging sovereign debt portfolios. He also runs our Global Markets Alpha product which
invests across fixed income asset classes.
4. Source: Aviva Investors, 31 December 2014
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Contact Us Important Information
Aviva Investors Pacific Pty Ltd (‘AIPP’, ‘we’, ‘us’, or ‘our’) (ABN 87 153 200 278,
Australia AFSL 411458) is the issuer of this document and is wholly responsible for its
Aviva Investors Pacific Pty Ltd contents.
Level 39,
385 Bourke Street This document is not a product disclosure statement or a prospectus as these
Melbourne 3000 terms are defined in the Corporations Act 2001 (Cth), and is not required to be,
+613 8459 2216 and has not been, lodged with or registered by the Australian Securities and
info.au@avivainvestors.com Investments Commission. Consequently ASIC does not take any responsibility
for its contents.
This document is not directed to, and should not be considered by, ‘retail
clients’ (as defined in section 761G of the Corporations Act 2001 (Cth) and
applicable regulations).
Accordingly, investments in the financial products and services described in
this document may only be arranged by AIPP in Australia in circumstances
that do not require disclosure to investors under Part 6D.2 or Part 7.9 of
the Corporations Act, whether because the recipients of this document are
‘wholesale clients’ (as defined in section 761G of the Corporations Act and
applicable regulations), or otherwise.
The Aviva Investors Multi-Strategy Target Return fund may invest a
significant proportion of its assets in derivatives contracts with the aim of
gaining exposure to an underlying asset class at lower cost than owning
the asset class outright, and or of gearing the fund’s exposure to that
asset class. The risk involved in this approach may be considerable and
may not be suitable for some investors.
No part of this document is intended to constitute advice other than
general advice (as defined in section 766B (4) of the Corporations Act),
or make a recommendation of any nature.
Unless stated otherwise any opinions and future returns expressed are
those of Aviva Investors and based on Aviva Investors internal forecasts.
They should not be viewed as indicating any guarantee of return from
an investment managed by Aviva Investors nor as advice of any nature.
The value of an investment and any income from it may go
down as well as up and the investor may not get back the
original amount invested.
Aviva Investors Pacific Pty Ltd, a company incorporated under the
laws of Australia with Australian Business No. 87 153 200 278 and
Australian Company No. 153 200 278, holds an Australian Financial
Services License (AFSL 411458) issued by the Australian Securities
and Investments Commission. Business Address: Level 39, 385
Bourke Street, Melbourne 3000, Australia.
The distribution and offering of financial products and
services is restricted by law in many jurisdictions. This
document is intended only for use in Australia and should
not be relied on in any other jurisdiction.
20150414_02
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