Fund manager Robeco is aiming for a 4% return over cash from Flexible Solution, a multi-asset strategy that will mix equities, bonds, cash and alternatives.
The strategy focuses on retail and wholesale investors looking to beat inflation and the strategy will not be anchored by a traditional benchmark but instead focus on outcomes.
With cash plus 4% targeted on an annual basis, the returns aim to outpace inflation using a dynamic asset allocation approach that considers how conditions vary across the market cycle.
The said the strategy is for investors with a mid-range risk appetite and a standard five-year investment horizon for returns.
Robeco said the strategy will not necessarily follow the usual ‘60-40’ multi-asset mix of many similar funds but will have a “far more active and dynamic views” in terms of the asset mix.
Robeco’s five-year outlook for inflation is that inflation is going to run higher than the central banks’ virtually universal Consumer Price Index (CPI) target of 2% for the next four or five years, with a base case of 2.5% in euros.
Colin Graham, head of multi asset strategies at Robeco, said: “Many investment strategies are focused on a benchmark. At Robeco we believe our clients don’t start their investment journey with a benchmark, but with an investment goal. Therefore, the central focus of this is achieving an annual return of cash plus 4% return at a medium risk level.
“However, we’re turning this around by using some of the best underlying security selection from across Robeco, whether that’s from the equity side or credit selection.”
