HISTORY OF THE FUND
Lowes as a firm have a long history of managing collective investment funds stretching back to the 1980s. In 2010 the
decision was taken to merge all the different funds that were being managed by Lowes, covering different asset
classes geographies, into one truly diversified, multi-asset fund of funds investment solution, and in April that year
the Diversified Strategy Fund was created.
Initially domiciled in Jersey, the fund was transferred to the UK in May 2015 as the RHFS Diversified Strategy Fund.
This change meant as an FCA regulated fund, it was more accessible to UK investors and intermediaries. In
September 2017 a change of Authorised Corporate Director (ACD) from Rawlinson & Hunter Fund Services to
Maitland Institutional Services saw the name of the fund change slightly, this time becoming the MI Diversified
Strategy Fund, as it still is today.
Despite the changes over the years, since its original launch in April 2010, the Fund has been managed following
the same core investment philosophy and strategy, simply being finely tuned as time and regulation have progressed.
ABOUT THE FUND
The investment objective of the Fund is to achieve long term capital growth.
The Fund is an FCA regulated, UCITS compliant, multi-asset fund, which seeks to meet its objective by investing
in a combination of equities, fixed interest and structured notes. With the exception of structured notes, this exposure will
predominantly be through investment in OEICs, unit trusts, Exchanged Traded Funds (ETFs) and other collective
investment schemes across several management groups.
The Fund is managed by Lowes Investment Management and capitalises on skills and processes with regard to
investment selection and portfolio construction, which have been fine tuned and evolved over several decades.
The Fund is a member of the IA Flexible Investment sector, authorised by the Financial Conduct Authority.
The value of investments can fall as well as rise. You may get back less than you invested.
INVESTMENT PROCESS
Portfolio construction is a combination of both top down and bottom up analysis. The process is never static, just like
the investment markets, being an ongoing evolution. The process is aligned to the investment objective and risk
parameters of the Fund.
Asset Allocation
This is made in conjunction with our Market Outlook, which is prepared and presented to the Investment Committee
on a quarterly basis. In line with the spirit of the IA Flexible Investment sector criteria the Fund has a significant level
of flexibility. There is a neutral asset class allocation but a wide range is then permitted around this to encourage flexibility
when it is deemed appropriate. Asset allocation is always in accordance with UCITS’ rules.
Quantitative Analysis
With regard to investment selection, absolute and relative returns are assessed relative to benchmark and peer groups,
with sub-sector peer groups created when appropriate. Focus is particularly given to performance over our preferred
discrete periods for performance measurement, on an absolute, relative and risk adjusted basis. When considering
investment trusts, consideration is also given to criteria such as premium/discount to net asset value, gearing and liquidity.
When assessing structured notes, consideration is given to the growth rate relative to its pay off profile, the credit rating
of the issuing bank and its terms. The growth rate is assessed on a simple and annualised basis to allow comparison
to the longer term performance of equities of the underlying index. An historic backtest is also conducted to assess
the potential success of the strategy. This is leveraging off the extensive knowledge which the investment manager has
built up during many years.
Qualitative Analysis
This is complementary but carries equal importance to quantitative analysis. Consideration is given to investment
objective, philosophy and process. Focus is also placed on the investment style adopted by the manager(s).
The fund manager(s) career, history, tenure, support and resources are also assessed.
Portfolio Construction
Before any investment is made consideration is given to what impact it will have on the overall portfolio, including
asset and geographical allocation, investment style and fund manager concentration. Correlation to existing holdings
is also considered. Checks are made to ensure that asset allocation and underlying holdings are in line with the Fund’s
investment objective, risk tolerance and parameters, along with UCITS’ rules.
PERFORMANCE OF THE FUND
Cumulative Performance (31/07/2023)
| 6 months | 1 year | 3 years | 5 years | |
|---|---|---|---|---|
| Fund | -3.20% | -0.40% | 5.85% | 6.39% |
| Comparator | -0.44% | -0.02% | 12.14% | 16.76% |
Discrete Performance
| 30/06/2022 to 30/06/2023 |
30/06/2021 to 30/06/2022 |
30/06/2020 to 30/06/2021 |
30/06/2019 to 30/06/2020 |
30/06/2018 to 30/06/2019 |
|
|---|---|---|---|---|---|
| Fund | 0.66% | -7.84% | 16.82% | -2.15% | 1.25% |
| Comparator | 3.29% | -7.09% | 19.84% | 0.31% | 2.95% |
Source for all data: FE Analytics. Bid-Bid. Total Return.
0191 281 8811
MIDSFund@Lowes.co.uk