Industry Voice: Celebrating five years of the truly active, low-cost, CT Universal MAP range

From concept to reality, is it possible to offer investors access to a truly active strategy at a fee on par with passive multi-asset strategies? Five years of experience provides some interesting insights.

clock • 4 min read
Industry Voice: Celebrating five years of the truly active, low-cost, CT Universal MAP range

In 2017 Britain invoked Article 50 of the Lisbon Treaty, triggering the initiation of proceedings to break away from the European Union. The Brexit vote, of the previous year, had been merely advisory, activating Article 50 meant there would be no turning back.

It was against this background and a favourably heady time in financial markets, in November of that year we launched a low-cost, actively managed multi-asset range; a risk controlled portfolio option designed to cover a host of growth and income needs - the CT Universal MAP range.

The differentiated offer for investors was access to a truly active strategy, delivered at a competitive fee on par with peers' passive multi-asset strategies.

In the five years since the funds' launch, the world has been all over the place. One view might be that this was a terrible time to start a multi-asset, risk-targeted, investment range. However, a more positive take, ours, is that it has also been a brilliant time because the volatility has given us the opportunity to showcase the benefits of active investing - differentiating our offer from more static, benchmark-aware products.

We wanted to avoid concentration risks, building a diversified portfolio across styles, factors and timeframes. While this would likely miss out on the highest highs it would also avoid the lowest lows, delivering clients a smoother return profile.

The heady days of launch

In 2017, global economic growth was accelerating and stock markets around the world were hitting record highs. The International Monetary Fund (IMF) stated, in October of that year, that "the outlook is strengthening, with a notable pickup in investment, trade, and industrial production, together with rising confidence." After a decade when optimism had been in short supply, the IMF prediction that global economic growth would average 3.6% in 2017 was welcome news.

The Eurozone was a particular bright spot at the time. Growth was at a ten-year high and unemployment at a nine-year low. The US economy grew 3.3% in the third quarter of 2017, a three-year high, and unemployment was the lowest it had been since 2000. China was on course to beat its target of 6.5% growth in 2017 and even Russia, which had struggled for several years because of low oil prices, was seeing modest growth.

In the five years since that synchronised upswing the world has become quite a different place. The ‘sweet spot' of inflation - low but no deflation - has evaporated and the extended era of low interest rates is behind us, at least for a few years.

 

This post is funded by Columbia Threadneedle Investments

Important information: Past performance is no guide to future returns. The value of investments and any income is not guaranteed and can go down as well as up and may be affected by exchange rate fluctuations. This means that an investor may not get back the amount invested. Your capital is at risk. Threadneedle Specialist Investments Funds ICVC ("TSIF") is an open-ended investment company structured as an umbrella company, incorporated in England and Wales, authorised and regulated in the UK by the Financial Conduct Authority (FCA) as a UCITS scheme. Certain sub-funds of TSIF are registered for public offer in Austria, Belgium, Chile, Denmark, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Singapore, Spain, Switzerland, Sweden and the UK. Shares in the Funds may not be offered to the public in any other country and this document must not be issued, circulated or distributed other than in circumstances which do not constitute an offer to the public and are in accordance with applicable local legislation. Please read the Prospectus before investing. Subscriptions to a Fund may only be made on the basis of the current Prospectus and the Key Investor Information Document, as well as the latest annual or interim reports and the applicable terms & conditions. Please refer to the `Risk Factors' section of the Prospectus for all risks applicable to investing in any fund and specifically this Fund. The above documents are available in English, French, German, Portuguese, Italian, Spanish and Dutch (no Dutch Prospectus), Swedish (for the Key Investor Information Document only) and can be obtained free of charge on request from: Columbia Threadneedle Investments PO Box 10033, Chelmsford, Essex CM99 2AL. Issued by Threadneedle Investment Services Limited. Registered in England and Wales, Registered No. 3701768, Cannon Place, 78 Cannon Street, London EC4N 6AG, United Kingdom. Authorised and regulated in the UK by the Financial Conduct Authority. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies. columbiathreadneedle.com

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