UK – Gartmore will be offering a cautious managed fund to institutional investors as they seek to reduce volatility.

The Gartmore cautious managed fund, run by Chris Burvill, head of equity income, is already offered to retail investors, and has returned over 10% since launch at the end of January this year. The fund is now being offered to institutional investors in response to demand.

The fund can invest up to 60% of the total portfolio value in equities, which gives it the flexibility to adjust to changes in investment conditions. It offers the potential for steady performance during times of economic uncertainty, investing more in bonds when equity markets are falling and vice versa.

Consultants and clients have been positive in their feedback already, according to Frances Davis, head of global institutional at Gartmore. “In volatile markets, trustees of pension schemes are looking at income funds to reduce volatility and help preserve capital.”

The fund is expected to see significant demand from defined contribution schemes. Says Stephen Nimmo, head of pooled client services at Gartmore: “We expect the fund to fit into the lifestyle strategy of defined contribution schemes, whereby equities are invested at the early stages, and bonds dominate as retirement draws closer. The cautious fund would fit into the middle of the two stages.”

Gartmore Investment Management is based in London and has 44.7 billion pounds (63.5 billion euros) in assets under management.

Elsewhere, Ashburton Limited, the asset management division of FirstRand International Asset Management, has been appointed to run a US dollar cautious mandate for financial services group, Hansard International, based in the Isle of Man.

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