SJP launches four multi-index funds

How it works

The Polaris Multi-Index funds follow the same active asset allocation process as the existing Polaris range – using SJP’s in-house expertise to decide where and how much to invest in different markets and asset classes.

The underlying strategies in each of the Multi-Index funds are built from 14 index trackers, newly created by US financial giant State Street. These trackers encompass some of the world’s largest markets and asset classes, such as North America, Japan, global smaller companies and corporate bonds.

SJP chose to invest in newly created trackers rather than use off-the-shelf Exchange Traded Funds (ETFs) to ensure the strategies fit perfectly with its investment philosophy and operational framework.

Like Polaris, the new multi-asset funds will be managed by State Street Investment Management and utilise the asset allocation views of SJP’s internal team, led by chief investment officer Justin Onuekwusi. Lead fund managers Robin Ellis, director of portfolio management and Hamish Gibberd, multi asset portfolio manager will oversee portfolio construction.

The key difference

The new range implements these decisions using passively managed index trackers rather than actively managed funds.

This makes the Multi-Index range simpler, more cost-effective, and focused on one main driver of performance: asset allocation. By contrast the traditional Polaris and InRetirement ranges combine both asset allocation and active stock selection to seek outperformance.

Given the lower cost nature of index trackers, the ongoing charge of the four Multi-Index funds is expected to be 0.20%. This compares with a slightly higher ongoing charge (0.45-0.55%) for the Polaris funds. The Polaris funds feature a bias to active managers and invest in many of SJP’s standalone funds.

The lower cost underlying strategies makes the Multi-Index range a more straightforward option. To put it simply, the Multi-Index funds have one lever for outperformance: the active asset allocation decisions. By comparison, SJP’s other multi-asset ranges, Polaris and InRetirement, have two levers to drive outperformance: active asset allocation and stock selection by the many active fund managers through which they can invest. 

Why it matters

“The launch of the Multi-Index range is a natural evolution of Polaris,” says Tom Beal, Investment Director at SJP.

“We want to continually evolve, to meet our clients’ changing needs and demands. Polaris Multi-Index represents a diversification opportunity for many clients. Different types of investment styles work better than others depending on the market cycle. This isn’t about debating whether active or index investing is better – both have a valuable role to play.”

“Lower-cost index funds are increasingly popular among investors looking for transparency and diversification.”

The new Multi-Index range allows SJP to offer clients a cost-effective, multi-asset solution — without sacrificing the benefits of expert, active asset allocation.

Who it’s for?

The Polaris Multi-Index range may be suitable for a wide variety of investors, depending on personal preferences and risk appetite. It could appeal particularly to those who:

• Prefer a lower ongoing charge. 
• Want a diversified, ready-made investment solution.
• Value active oversight but are comfortable investing through index trackers.

Performance expectations

Justin Onuekwusi, Chief Investment Officer, explains: “We expect the Polaris and Multi-Index ranges to behave differently under different market conditions. Individual funds in each range – i.e. Polaris 3 or Multi-Index 4 – are managed to specific objectives and within defined parameters. How they do so is what differs. This means at times the Multi-Index range may do better than the Polaris funds and vice versa.”

Tom adds: “Looking ahead, I see various multi asset solutions as the core of our investment proposition. This is where we can best ally our significant expertise in asset allocation with our ability to select the best managers and strategies from around the world.”

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Get in touch

As always, decisions about switching or choosing between Polaris ranges should be made with an SJP Financial Adviser.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.  You may get back less than you invested