Insight moves DTR fund to Absolute Return sector

Insight Diversified Target Return fund is moving from the IMA Cautious Managed sector to the Absolute Return peer group to better reflect its investment process.

The shift comes after the IMA reviewed the wording for funds in the Absolute Return sector to include those with an annual return target.

The move is effective immediately.

Mike Pinggera, manager of the £200m multi-asset fund, says the fund's investment strategy will not change as a result of the sector shift.

"We continue to target a rolling annual equity-like return over the investment cycle in the region of cash plus 4% over the long term."

He says the sector was quite narrow a few years ago but has grown to include about 50 funds at present, and is now more appropriate and comparable for investors.

"Investors can now compare the fund against a reasonably broad peer group," he says.

"There was always a debate on sectors classifications, which are quite loose. But we thought the new wording of the Absolute Return sector is almost identical to the core objective of the fund, so would better represent it."

"Besides, the Cautious Managed sector can have up to 60% in equities, which does not fit well with the rolling 12-month positive return target.

"Generally we would have far less risk that the average cautious managed fund, holding a much lower allocation towards the equity space and therefore lower volatility."

The manager says the fund's direct equity exposure through long positions stands at 32%. A further 22% is in fixed income, with predominant exposure to high yield and senior loans.

Total return positions are at 14% of the portfolio, while commodities make up 6%, and real estate makes up 2%.

Pinggera is holding 20% in cash, having trimmed back positions in government bonds. "The cash position is just an investment-driven result of the fact we took profit elsewhere."