Industry Voice: MAF Core — a multi-asset solution for multiple client types

Aviva Investors' MAF Core range is designed to appeal to a broad range of investors. Shane O’Brien introduces five client types who may find MAF Core an attractive addition to their portfolios.

clock • 7 min read
Industry Voice: MAF Core — a multi-asset solution for multiple client types

A good multi-asset strategy should be resilient, dynamic and provide long-term growth for its investors. Today's retail clients also want risk profiling, diversified exposure in terms of geographies and asset classes, the prospect of competitive returns, and environmental, social and governance (ESG) considerations built into the investment process - all at a lower cost. MAF Core is constructed to meet each of these needs, which we believe makes it appealing to a broad range of investors.

So, let's take a look at five types of retail investor who the Aviva Investors MAF Core range might appeal to.

Client A: The cost-focused investor

With more transparency these days around charges, performance, and the range of products available, investors can move quickly should they perceive a fund to be underperforming, uncompetitively priced, or both.

Whilst investors in any of the five funds in the MAF Core range get the benefits of risk profiling, a global asset allocation approach and ESG uplift, we use passive building blocks to keep the ongoing charges figure capped at what we believe is a highly competitive 0.15 per cent a year.

Compounding is a powerful force in the world of investing, and price is one its most powerful sources. Costs can really eat into your investment pot - keep them down, and those savings can really help clients achieve their long-term goals.  

Client B: The ESG-conscious

ESG awareness continues to grow among retail investors. There are those that want ‘dark green' products that closely match their ethical values. But there are plenty of others who are mindful of the big issues like climate change, but still want to have a broad and well diversified solution that doesn't venture too far away from the index.

As a business with a track record in responsible investing that stretches back more than five decades, our MAF Core range aims to meet the needs of investors who want a simple solution with an enhanced ESG profile.

Our approach to delivering this enhanced ESG is threefold: 1) avoid the bad; 2) invest in the good; 3) engage and improve.

On the first point, the MAF Core range applies the Aviva Investors baseline exclusions policy, which removes exposures to areas such as controversial weapons, thermal coal, Arctic oil, oil sands and tobacco. As for investing in the good, MAF Core aims to deliver an ESG uplift, by tilting the portfolio towards better-scoring ESG companies and countries, while maintaining a similar risk-return profile to the index.

We hold the companies we own to account through ongoing engagement and active voting at company AGMs (although we may decide to exit an investment if a firm refuses to engage or improve). We also work hard to make an impact on economies and society more broadly by seeking to influence policymakers and regulators to create more sustainable financial markets. We call this practice macro stewardship.

Client C: The investor with a core-satellite approach

Some clients want more discretion over what they invest in and perhaps want a part of their portfolio in adventurous selections. To enable this, advisers often build a ‘core-satellite' approach, using a simple foundation solution to help anchor to a particular risk profile and compliment with a higher risk or alternative solution.

We believe MAF Core could be a staple solution in any blended portfolio, acting as a base for more adventurous funds to be added in. As a comparatively low-cost and simple solution, MAF can be mixed with more expensive solutions to keep overall costs down while still offering the potential of competitive returns and diversification.

Client D: The globally-minded investor

Some investors want a more diversified investment solution than one narrowly focused by asset class or geography. As such, a product that benefits from a truly global asset allocation approach across a broad range of asset classes could meet that need.  

The key point of differentiation is the global approach over a domestic UK bias. Other solutions in the UK have a large home bias in equity and fixed income. But we know many clients have homes, jobs, and cash in the bank in the UK. For them, we believe going global makes more sense from a diversification perspective. We also believe it makes sense from an investment perspective. With the UK only making up around two per cent of global GDP, it begs the question: why should a multi-asset portfolio be largely skewed to UK assets?

Client E: The investor who wants to know what they can expect

For some investors, all they really want is to keep things simple. They could be a younger client fairly new to investing or someone with a modest pot that doesn't want their portfolio to become overly complicated with too many funds. To these clients, MAF Core could be seen as a one-stop solution that offers diversified exposure, ESG built in, and the opportunity to pick a fund that matches their particular risk appetite. 

It can also be more straightforward for advisers to explain what's going on in the fund. Since the allocations are well established and the different building blocks deliver returns similar to a market index, it can be easier for the adviser to set expectations of how the fund may perform and make performance reviews easier.

Ticking all the boxes

There are a lot of boxes to be ticked to meet the varying needs of retail clients, but this is exactly what our MAF Core range was designed for.

With over four decades' experience in the sector, a well-resourced team of over 40 dedicated professionals, and the knowhow that comes with managing around £98 billion in multi-asset portfolios, we believe MAF Core offers a compelling solution for a broad range of client types.

 

Key Risks

Investment & Currency risk - The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency exchange rates. Investors may not get back the original amount invested.

Emerging markets risk - Funds may invest in emerging markets; these markets may be volatile and carry higher risk than developed markets.

Derivatives risk - The funds may use derivatives; these can be complex and highly volatile. Derivatives may not perform as expected, which means the funds may suffer significant losses.

 

Important information

THIS IS A MARKETING COMMUNICATION.

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited ("Aviva Investors"). Unless stated otherwise any opinions expressed are those of Aviva Investors. 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 can go down as well as up. Investors may not get back the original amount invested.

The Aviva Investors Multi‐asset Funds comprise two ranges, each with five funds (together the "Funds"):Aviva Investors Multi-asset Plus Fund range comprises the Aviva Investors Multi‐asset Plus Fund I ("MAF Plus I"), the Aviva Investors Multi‐asset Fund Plus II ("MAF Plus II"), the Aviva Investors Multi‐asset Plus Fund III ("MAF Plus III"), the Aviva Investors Multi‐asset Plus Fund IV ("MAF Plus IV") and the Aviva Investors Multi‐asset Plus Fund V ("MAF Plus V") Aviva Investors Multi-asset Core Fund range comprises the Aviva Investors Multi‐asset Core Fund I ("MAF Core I"), the Aviva Investors Multi‐asset Fund Core II ("MAF Core II"), the Aviva Investors Multi‐asset Core Fund III ("MAF Core III"), the Aviva Investors Multi‐asset Core Fund IV ("MAF Core IV") and the Aviva Investors Multi‐asset Core Fund V ("MAF Core V").

The Funds are sub-funds of the Aviva Investors Portfolio Funds ICVC. For further information please read the latest Key Investor Information Document and Supplementary Information Document. The Prospectus and the annual and interim reports are also available on request. Copies in English can be obtained free of charge from Aviva Investors UK Fund Services Limited, St Helen's, 1 Undershaft, London EC3P 3DQ. You can also download copies from our website. Issued by Aviva Investors UK Fund Services Limited. Registered in England No 1973412. Authorised and regulated by the Financial Conduct Authority. Firm Reference No. 119310. Registered address: St.Helen's, 1 Undershaft, London EC3P 3DQ. An Aviva company. 349923 - 30/09/23.

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