Threadneedle (Lux) Euro Dynamic Real Return Fund

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A long-only, dynamically managed multi-asset fund that targets a positive real return of 4% above EU inflation (CPI)

“With the Euro Dynamic Real Return Fund, our goal is to deliver consistent performance, even in times of market volatility. Rather than constrain our opportunity set, each position needs to earn its way into the portfolio from a return and risk perspective. Having the ability to rebalance our portfolio actively is key to navigating the current environment and ultimately delivering a smoother overall investment ride.”
– Maya Bhandari

Fund Description

An unconstrained, unlevered active asset allocation fund that targets a positive real return above European inflation (CPI) over the medium to long term.¹ The portfolio manager has the flexibility to invest directly in securities, with additional allocation to internally-managed funds and passive strategies. The investment team has full look-through to all portfolio positions which facilitates robust risk management.

Dynamic asset allocation

The fund is able to take advantage of a wide range of investment opportunities as they present themselves thanks to its unconstrained approach, with no benchmark restrictions. There is ‘no neutral’ and as active investors we can invest across a range of asset classes to source the very best ideas for the portfolio.

¹European Inflation (CPI) is defined as the Monetary Union index of consumer prices (MUICP). Please note that the performance target may not be attained. The performance target is gross of fees and over a 3-5 year investment horizon.

Key Facts

Fund launch date
24 April 2018

Asset class weightings
Equities: 0-75%
Fixed income and cash: 0-100%
Commodities: 0-20%
Alternatives: 0-10%

Holdings
The portfolio invests in direct investments, derivatives, passive strategies and in-house funds

Investment approach

We seek to achieve the fund’s performance objective by dynamically changing the portfolio risk budget; we are able to select from regional equity, fixed income and commodity market exposure where appropriate, but, importantly, the portfolio can also be zero-weighted in any asset class. There is no ‘neutral’ allocation, so every investment position is a risk position. The typical average holding period is 12-18 months, although the actual holding period can vary depending on our investment outlook.

The Asset Allocation Strategy Group uses the output from three proprietary research groups to formulate its macroeconomic and thematic views, and defines the investment environment used to build asset allocation portfolios. This is combined with a valuation framework across all asset classes, and is used by the group to determine its preferred asset allocation and risk preferences. We manage this strategy using a three stage approach, which is outlined in the chart below:

Proven and repeatable investment process

Fund Manager

No data was found

Key Risks

Investment Risk

The value of investments can fall as well as rise and investors might not get back the sum originally invested.

Investment In Funds

The Investment Policy allows the fund to invest principally in units of other collective investment schemes. Investors should consider the investment policy and asset composition in the underlying funds when assessing their portfolio exposure.

Currency Risk

Where investments are in assets that are denominated in multiple currencies, or currencies other than your own, changes in exchange rates may affect the value of the investments

No Capital Guarantee

Positive returns are not guaranteed and no form of capital protection applies.

Issuer Risk

The Fund invests in securities whose value would be significantly affected if the issuer refused, was unable to or was perceived to be unable to pay.

Interest Rate Risk

Changes in interest rates are likely to affect the fund’s value. In general, as interest rates rise, the price of a fixed rate bond will fall, and vice versa.

Valuation Risk

The fund’s as sets may sometimes be difficult to value objectively and the actual value may not be recognised until assets are sold.

Investment In Derivatives

The Investment Policy of the fund allows it to invest materially in derivatives.

Volatility Risk

The fund may exhibit significant price volatility.

Important Information

For internal use by Professional and/or Qualified Investors only (not to be used with or passed on to retail clients). Past performance is not a guide to future performance. 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. Threadneedle (Lux) is an investment company with variable capital (Société d’investissement à capital variable, or “”SICAV””) formed under the laws of the Grand Duchy of Luxembourg. The SICAV issues, redeems and exchanges shares of different classes. The management company of the SICAV is Threadneedle Management Luxembourg S.A, which is advised by Threadneedle Asset Management Ltd. and/or selected sub-advisors. This material is for information only and does not constitute an offer or solicitation of an order to buy or sell any securities or other financial instruments, or to provide investment advice or services.

“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. Documents other than KIIDs are available in English, French, German, Portuguese, Italian, Spanish and Dutch (no Dutch Prospectus). KIIDs are available in local languages. Documents can be obtained free of charge on request by writing to the management company at 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg, from International Financial Data Services (Luxembourg) S.A. at 47, avenue John F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, from www.columbiathreadneedle.com and/or from Belgium: CACEIS Belgium S.A., avenue du Port 86 C b 320, 1000 Brussels.

The mention of any specific shares or bonds should not be taken as a recommendation to deal. The fund characteristics described above are internal guidelines (rather than limits and controls). They do not form part of the fund’s objective and policy and are subject to change without notice in the future.The analysis included in this document has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.

Threadneedle Management Luxembourg S.A. Registered with the Registre de Commerce et des Societes (Luxembourg), Registered No. B 110242 44, rue de la Vallée, L-2661 Luxembourg, Grand Duchy of Luxembourg. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.