Fund Range

The Aviva Investors Multi-Asset Core funds are individually detailed below:

*Target global equity volatility is based on the MSCI ACWI Index (GBP) 

Investment Process

The MAF Core funds are managed by Aviva’s multi-asset team who collaborate with the dedicated single asset class teams at Aviva for idea generation and implementation. Aviva employ a collaborative approach drawing on investment ideas and research from both the single class team (equity and fixed income) who are based around the globe, and the Investment Strategy team.  The Investment Strategy team consists of economists and strategists who assess market conditions and forecast asset class returns over the medium to longer term. The Aviva Solutions team is also integrated into this process to broaden resource and provide ideas.  The first step in the investment process is setting the strategic asset allocation (SAA), which is the long-term asset allocation over a 7–10-year investment horizon.  A multi-asset allocation meeting is held that brings together the multi-asset portfolio managers, key representatives of the Investment Strategy team and fund managers from across the wider Aviva Investors investment floor. The aim is to determine asset allocation views that will enable the funds run by the Multi-asset team to generate excess returns over the long term. Aviva believe that a global approach should achieve a better risk-adjusted return over the longer term than one that is too concentrated in any region and as such they invest globally to give them as much flexibility and choice as possible. Assets can include shares and bonds of both developed and emerging markets, cash and money market instruments. Asset classes are grouped by risk commonalities (growth and defensive) rather than historical naming conventions while weights are adjusted to ensure that portfolios are not dominated by one specific risk contributor. Growth assets include equity and higher-risk forms of fixed income such as high yield and emerging market debt, whilst defensive assets include cash, government bonds, and lower risk corporate bonds. To determine the optimal strategic mix to align to each fund’s respective volatility target, Aviva analyse the risk and return characteristics of each of the individual asset classes, including factors such as expected return and volatility, tail risk, stress testing and currency hedging. They believe this provides them with a deeper understanding of the risk and return drivers than that delivered in models that focus more narrowly on return and volatility (such as a typical mean variance approach). They also use a combination of historical data and proprietary expected return projections. 

The MAF Core funds do not employ a tactical asset allocation (TAA) overlay and as such, the SAA is the key element in the investment process, however the strategic asset allocation will be reviewed periodically and at least once a year to ensure it remains relevant to changing market conditions.

The next stage of the investment process is the implementation phase where the fund managers will determine the best method to gain exposure to certain assets.  These decisions are taken with consideration of the volatility, beta, duration and yield in the portfolios to ensure that the funds will perform as expected.  the MAF Core fund range invests primarily in passive building blocks in order to keep the proposition simple and low cost however they access asset classes such as emerging market debt and global high yield via an internal active manager due to the higher yielding nature of these assets. 

Our Opinion

Aviva offer a strong multi-asset proposition based on their global research capabilities and dedicated single asset class teams. The range benefits from a collective, team-based approach led by a strong core multi-asset team. There is a comprehensive decision-making process across the Multi-asset fund ranges, drawing on the expertise of a wide range of investment professionals with dedicated skill sets. 

The Aviva MAF Core funds are managed by the same team that manage the Aviva MAF Plus range of funds which have been an RSMR rated range since 2018. The launch of the MAF Core funds in November 2020 provided investors with a lower cost option of these strategies - the MAF Core funds take a longer term strategic approach and make extensive use of inhouse passive vehicles to keep costs low. The MAF Plus funds are much more dynamically managed, making tactical adjustments and using more actively managed investment vehicles (including externally managed funds) in their underlying holdings. An important differentiator for both ranges relative to the wider market is their risk targeting approach which is set towards specific levels of global equity volatility.  They believe that a relative volatility target is more appropriate than an absolute volatility target as the market environment and volatility regime constantly evolve over time.    

Overall, the MAF Core funds are managed by a well-resourced and experienced multi-asset team, using a well-established and detailed investment process and with an OCF fixed at 0.15%, the funds are very competitively priced.  Based on these factors, we believe that Aviva MAF Core funds are an excellent option for advisers seeking exposure to a lower cost, risk targeted multi-asset solution for their clients.