BMO Overseas Equity-Linked UK Inflation Fund 3 Acc

Specialist

Rated Fund 2017-20. Takes a liability-driven investment approach

This fund uses an approach popular with institutional investors known as liability-driven investment. The aim is to enable investors to hedge their liabilities – which would normally involve investing wholly in government and corporate bonds – while still benefiting from exposure to equity market returns. Named managers Nabil Owadally and Christopher Higman both work in the liability-driven investment portfolio management team at BMO Global Asset Management. The fund’s objective is to provide growth through a combination of overseas equity exposure and an investment in inflation-linked UK government bonds and cash.

The index-linked gilts exposure is predominantly to bonds with terms of five years or more. The fund is structured so that 30% is held in cash or high-quality money market instruments and the remaining 70% is invested in inflation-linked gilts.

In addition, the fund aims to provide 100% exposure to equity returns using equity futures. The equity overlay is achieved by investing in a well-diversified basket of overseas equity futures with an asset allocation of 34% to the US (S&P 500), 33% to Europe (Eurostoxx 50 index futures), 17% to Japan (Topix), 8% to Hong Kong (Hang Seng) and 8% to Australia (SPI 200).

The government bond portfolio is also managed on a passive basis to match an index of inflation-linked gilts with more than five years to maturity. The fund is rebalanced monthly to return the asset allocation to the target weights.

Narrative and ratings content all as of 01 January 2020.

See all Money Observer rated funds
Name
BMO Overseas Equity-Linked UK Inflation Fund 3 Acc
Manager
BMO Asset Management Limited
Type
Open Ended Investment Company
ISIN
GB00B4NVY384
Sector
Specialist
Launched
07/12/2009
OCF
0.34 %
3 Year Sharpe
0.55
Yield
0.1 %
Benchmark
MSCI World Ex UK GR LCL
The Fund aims to combine overseas equity exposure with investment in UK government securities with some cash. The Fund will invest predominantly in over 15 year gilts with approximately 25% in cash (comprising deposits, commercial paper, certificates of deposit and short dated gilts with a maximum three months to maturity). The overseas equity exposure will comprise exchange traded futures on the following indices (with target weightings): 1/3 S&P500, 1/3 Euro stoxx 50, 1/6 Topix, 1/12 ASX200, 1/12 Hang Seng.
Holding %
United Kingdom of Great Britain and Northern Ireland 1.25% 4.50 %
United Kingdom of Great Britain and Northern Ireland 0.12% 4.38 %
United Kingdom of Great Britain and Northern Ireland 0.38% 4.23 %
United Kingdom of Great Britain and Northern Ireland 0.5% 3.67 %
United Kingdom of Great Britain and Northern Ireland 0.75% 3.60 %
United Kingdom of Great Britain and Northern Ireland 1.12% 3.48 %
United Kingdom of Great Britain and Northern Ireland 0.62% 3.44 %
United Kingdom of Great Britain and Northern Ireland 0.12% 3.42 %
United Kingdom of Great Britain and Northern Ireland 0.62% 3.32 %
United Kingdom of Great Britain and Northern Ireland 0.25% 3.25 %
Name
BMO Asset Management Limited
Address
EC2A 2NY, London, United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Nabil Owadally
Joined 09/20/2013

Data provided by Morningstar.

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