Following a strategic review, Invesco said on Wednesday (27 September) that it would be closing its Global Targeted Returns strategy after concluding that current demand for targeted return strategies had continued to diminish.
The closure of the fund followed the announcement by abrdn this summer that GARS, a fellow absolute return peer, would cease operating as a standalone vehicle and be rolled over into the company’s diversified asset funds after a strategic review.
Invesco to close global targeted returns strategy in push to simplify multi-asset range
Despite the downfall of both rivals, the asset manager is still standing up for its AIMS Target Return strategy, which has shed £456.8m in outflows over the last twelve months, according to FE fundinfo.
A spokesperson told Investment Week that although the playing field has “narrowed”, global macro is still a “sizeable” sector within the liquid alternatives landscape.
“In 2022, when equities and bonds were down in the double digits, AIMS Target Return generated +6% returns, providing enhanced diversification and controlling volatility in our clients’ portfolio when they needed it most,” the spokesperson said.
“Given this performance, we are seeing increased client interest and positive conversations with consultants.”
The AIMS Target Return fund is a multi-strategy portfolio that targets an annual return of cash plus 5% per annum above the central bank base rate over rolling three-year periods, with less than half the volatility of global equities.
The strategy, which holds £2.5bn in assets, has been managed since launch by Peter Fitzgerald, CIO for multi-asset and macro at Aviva Investors, with multi-strategy funds head Ian Pizer joining as a co-manager in May 2021.
abrdn to merge GARS into diversified asset funds
Aviva Investors Multi-Strategy Target Return was launched in July 2014, shortly after Euan Munro, the creator of GARS at Standard Life in 2008 and current CEO of Newton Investment Management, joined Aviva Investors as its chief.
Invesco launched the Global Targeted Returns strategy in 2013, after poaching a trio of fund managers that worked on the GARS team at the former Standard Life Investments: David Millar, Dave Jubb and Richard Batty.
The strategy, now run by Georgina Taylor, Richard Batty, Sebastian Mackay and Gwilym Satchell, aims to achieve a positive total return in all market conditions over a rolling three-year period.
It has a target return of 5% gross return per annum above three-month EURIBOR over a rolling three year period, with less than half of the volatility of global equities.
Aviva’s Fitzgerald makes tactical bet on Nasdaq
In the last twelve months, the Global Targeted Returns fund shed over £396m in outflows, according to data from FE fundinfo. At the time of the announcement of its closure, it held £364m in assets under management.
Meanwhile, once the UK’s largest mutual fund, GARS held £26.8bn in assets at its peak in May 2016. But AUM has significantly dropped since then, totalling £857m as of the end of June 2023, according to data from Morningstar Direct.
Performance had also suffered, with the fund consistently underperforming its benchmark over the last five years, according to data from FE fundinfo.
