Rachel HartmanUpdated on: October 10, 2024 10:36 am GMT
Ninety One Diversified Income Fund Gains Momentum Among Cautious Investors
The Ninety One Diversified Income Fund has recently been highlighted in the financial community, as it has been added to both the Hargreaves Lansdown Wealth Shortlist and promoted to the coveted Wealth List. With a focus on providing steady income and capital growth, this fund appears well-suited for cautious investors seeking stability in fluctuating market conditions.
Understanding the Fund and Its Strategy
Investment Focus
The Ninety One Diversified Income Fund, which manages assets totaling approximately £845 million, concentrates primarily on bond investments. It seeks to capture income while limiting volatility during wider market downturns. Lead manager John Stopford, who has been at the helm since 2012, has built a strong track record, steering the fund to a 52.33% return over the past ten years.
- Lead Manager: John Stopford
- Co-Manager: Jason Borbora-Sheen
- Investment Sector: IA Mixed Investment 0-35%
Portfolio Composition
As of July 2024, the fund holds a diverse asset allocation, with significant investments in government and corporate bonds, as well as some equities:
| Asset Class | Percentage Allocation |
|---|---|
| Developed Markets Government Bonds | 55.7% |
| Emerging Markets Government Bonds | 20.0% |
| Equities | 10.2% |
| Investment Grade Corporate Bonds | 6.5% |
Performance Highlights
In the past year, the Ninety One Diversified Income Fund generated a return of 7.44%, while the IA Mixed Investment 0-35% sector returned 9.17%. Although the fund’s performance may lag behind stocks during bullish markets, it serves as a reliable haven during downturns, proving its worth during periods of financial uncertainty.
Long-term Returns
- 2019-2020: 2.89%
- 2020-2021: 5.79%
- 2021-2022: -6.46%
- 2022-2023: 3.04%
- 2023-2024: 7.44%
Recent Market Volatility
In a climate where many investors are worried about market volatility, the Ninety One Diversified Income Fund’s focus on income generation and capital preservation resonates well with those reticent to engage in high-risk schemes. The fund’s chief features include a yield of 5.16% as of July 2024, with investments balanced across defensive and growth assets.
Why Analysts Recommend the Fund
Hal Cook, a senior investment analyst at Hargreaves Lansdown, states that the fund is particularly appealing to “cautious investors looking for an alternative to cash as rates fall.” His confidence stems not only from the fund’s robust asset allocation but also from Stopford’s impressive management track record. Cook noted that the fund combines capital preservation with total returns, making it a fantastic option for retirees and conservative investors alike.
The Appeal of Bonds
The fund’s bond-heavy structure appeals to those wary of the erratic nature of equity markets. The increased stability is reinforced by investments in both developed and emerging market bonds, which provide additional avenues for returns while still aiming for lower volatility.
Risk Considerations
Despite the conservative strategy, potential investors should note that the Ninety One Diversified Income Fund is not without risk. It is categorized as a step up in risk from cash, but compared to other funds, it aims to limit potential losses while delivering consistent income. Investors should expect that income will constitute the majority of returns generated over time.
Conclusion
In an environment marked by economic uncertainty, the Ninety One Diversified Income Fund has emerged as a reliable option for income-seeking investors. Its recent addition to Hargreaves Lansdown’s Wealth Shortlist underscores its strong performance potential. With a seasoned management team, a robust portfolio of bonds, and a customer-focused approach, the fund appeals to those looking to secure their financial future, particularly in today’s volatile market atmosphere. For further investment guidance and insights, please visit Hargreaves Lansdown’s official site.
If you’re thinking about investing, it’s important to understand how much risk you’re willing to take. It can be really helpful to talk to a financial advisor if you’re not sure about something. Keep in mind that while this fund can help you earn money, the market can change, and you might lose some money too.
