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We take a closer look at the Aviva Multi Strategy Target Return Fund.
Who's it for? All investors
Whether you invest in shares or bonds, there is a risk that you can lose all of your investment. But, the hope is that you choose the right shares and bonds or the right investment fund, and that your investment rises in value. And although we all invest for the long term, we have to put up with short-term periods of volatility where the value of our investments can (and does) fluctuate quite wildly. But there is a select number of funds out there which aim to deliver a positive return on your investment no matter how volatile the global stock markets are. One of these funds is the Aviva Multi Strategy Target Return Fund.
The clue is in the name of the fund. The fund has a target return of ‘cash’ plus 5%. This means it is aiming to give investors a return of 5% above what the return is for cash. Because there are so many places to park your cash and the interest rate is different for all these places, Aviva has chosen the Bank of England base rate to represent the cash rate. But it’s important to understand that this is a target return and there is no guarantee that it will return 5% over cash each year. And, like all investments, there is a risk that you can lose your money. It’s also worth noting that this return target is an average return each year over a rolling three-year period, before costs and charges.
In order to attempt to deliver such a performance return to investors, the fund is obviously very different to your typical fund that invests in shares and bonds. How does it do it? Again, the clue is in the name – Multi Strategy.
The fund invests not only in shares and bonds, but in a number of other investments, including currencies and property. The fund also invests in more complex instruments and parts of the market in order to take a bet on which direction inflation is moving and where interest rates may go from here. The result is a diversified portfolio, which aims to deliver a return even if some parts of the global stock market are finding it difficult.
It’s all about diversification. About having different types of funds in your investment portfolio that do different things. There is no guarantee that this fund will give you the target return each year, but what it does is perform differently to funds that invest in shares and bonds. During periods when stock markets are rising strongly, we wouldn’t expect this fund to keep up, but on the flip side it could be an interesting fund to hold during periods when stock markets are having a difficult time. As a result, it can diversify your investment portfolio over the longer term.
In addition to the Aviva Multi Strategy Target Return Fund, there are also four more funds on the Barclays Funds List that have similar approaches to investing. They sit in a group of funds called the ‘Targeted Absolute Returns’ sector.
They are all part of the Barclays Funds List, where you can also find many other options. Find out more information about all of these funds.
To diversify your investment, you may like to consider our own Barclays Ready-made Investments (RMI). The RMI are just one example of a range of diversified funds which allow you to select the level of risk you are most comfortable with. These multi-asset funds invest in passive funds across a range of asset classes and regions, offering a globally diversified one-stop solution for investors. Ready-made Investments are not the only funds that we offer and they won’t be appropriate for everyone.
Whichever option you choose, you must accept that all investments can still fall in value as well as rise and you might get back less than you invest.
Investments can fall in value. You may get back less than you invested. These are our current opinions but the future, as ever, is uncertain and outcomes may differ. Past performance of the fund and its manager are not a reliable indicator of their future performance.
We don’t offer personal investment advice so if you’re unsure you should seek that independently. Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.
Read the Assessment of Value report [PDF, 683KB] for funds run by Barclays.
The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances. Smart Investor doesn’t offer personal financial advice. If you’re not sure about investing, seek independent advice.
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