Partner Insight: Multi-asset that delivers on what is promised

Since its launch in 2017, Columbia Threadneedle Investments' CT Universal MAP range has weathered an extraordinary array of market conditions. Through bull and bear markets, shifting deflationary and inflationary pressures, and enduring uncertain macro and geopolitical uncertainty, the strategy has demonstrated the added value of active management.

We spoke with advisory firms about why they have made the Universal MAP range a component of their investment offering and how the strategy benefits their clients' long-term goals.

Active management at a passive price

When asked what initially attracted them to the Universal MAP range, respondents highlighted a compelling value proposition and the long track record of a management team that can quickly react to changing marketing conditions.

"Our team will always consider new innovations to the market and are constantly looking for ideas that will benefit our clients' long-term goals. The portfolio management team can react to market conditions quickly and efficiently – be that to add value as opportunities arise or protect our clients as risk episodes emerge," says Chris Bull, Head of Business Development, Kellands Chartered Financial Planners.

Advisers use the strategy either wholly, with other multi-asset funds, or as part of a managed portfolio service (MPS). It can act as low-cost core to add additional solutions which can add further diversify portfolios.

"The low cost reduces the return needed to achieve the clients' goals. Additionally, the five portfolios are risk-targeted, allowing us to invest in a way a client will be comfortable with throughout the investment cycle," says Nathan Harris, Chartered Financial Planner, Strategic Solutions Chartered Financial Planners.

Jordan Laight, Financial Planner at BRI Wealth Management, echoes this sentiment and says that transparency was equally important in their decision-making process. "Their investment team and sales support provided detailed information on the investment process, which we found to be easy to understand and repeatable," he says. "Performance has been good and the 'active management at passive prices' is an attractive combination."

Tailored to client needs

The  Universal MAP range fits strategically within each firm's broader investment framework, recognising that each client's situation and financial planning journey is unique.

The active nature of the fund, the diversification benefits, the levers the investment team have at their disposal to react to changing market conditions and the defined risk bandings all cater for a client's personal circumstances.

"We use the strategies as building blocks alongside passive strategies. Flexibility is very important to us and our clients, and with these strategies we can adjust risk profiles without changing the disciple of the investment approach," says Harris.

"The fund's active approach allows it to be cognisant of concentrated and or expensive markets and adopt an allocation that incorporates these views, but in a structured and disciplined way. This allows the Universal MAP funds to act as core to a client's portfolio, with other funds and solutions added around – whether these are bespoke active approaches or passive ones," says Harris.

Laight describes a more specific application at BRI Wealth Management: "We use the funds within our Multi-Asset Service, which aims to diversify manager selection within a risk-rated range of portfolios for clients aiming for either growth and/or income."

He adds that these solutions work particularly well for certain client profiles: "These are usually clients with a longer time horizon, typically still in the accumulation phase, who have no requirement for bespoke ongoing management."

The relationship extends beyond the investment product itself. Bull values the access the firm has to portfolio managers – including office visits, video calls, bespoke commentary and economist insights – and the consistent and long-term track record of the fund range since its inception in 2017.

Performance without concentration risk

When it comes to supporting clients' long-term objectives, for Bull the numbers speak clearly. "Very simply, it has the best performing risk-rated range that we use with clients and has achieved this without significant biases, meaning their returns do not appear to be relying on one specific dominant market or trend," he says.

This balanced approach has proved particularly valuable in today's market environment, as advisers cite the concentration of the US technology companies as a cause for concern.  

"The fact the Universal MAP range has outperformed while being underweight to these technology companies gives us further comfort," says Bull.

Laight appreciates the steadier approach to returns. "They are not aiming to 'shoot the lights out', rather to achieve steady capital growth, which is in line with our deliberately cautious approach in the mandates where we allocate to the fund," he explains. He also highlights an often-overlooked benefit: "They also offer adviser training through Adviser Edge, which in turn provides greater support for our clients."

Active protection in volatile markets

Risk management capabilities have become increasingly important, and this is where advisers see Universal MAP's active approach delivering tangible benefits.

"This is really where the active component of Universal comes into its own. We have found that Universal MAP protects our clients on the downside in turbulent markets and adds alpha in an upward cycle," says Bull.

Bull pays particular attention to maximum drawdown metrics, and the Universal MAP range's track record has been reassuring. Additionally, the Universal MAP investment team will deploy "tactical tilts" in conjunction with their strategic asset allocation as and when needed. This ensures the portfolio managers can be nimble in turbulent markets while adding a layer of comfort to Bull and the underlying clients.

Laight takes a similar view of the risk-management benefits: "We like the use of active investments and the team's long-term approach to asset allocation. The funds are used alongside more passive options to control cost but still deliver returns within a risk-controlled framework."

A distinctive diversification benefit

In portfolio construction, the Universal MAP range fills a specific role that complements each firm's other holdings.

"Given the largely systematic component of the equity allocation and the slight 'value' bias of the range, it gives us something that other fund ranges do not," says Bull.

Laight describes how BRI Wealth Management thinks about blending different approaches: "We blend active/passive instruments along with different biases, i.e. HSBC have a US bias, RL typically a UK bias, but Columbia Threadneedle tends to have a neutral stance." This geographic neutrality provides valuable balance within diversified portfolios.