Saul bucks trend with return fund

The final salary arrangement has placed 5% of its assets with the Newton Asset Management Real Return Fund, which has achieved a 9.6% return per annum over the last three years.

The fund has been used as a DC default and for smaller defined benefit plans, and incresingly as a retail fund. But Saul is now one of the largest schemes investing in it.

The scheme has been implementing a move to diversify and reduce risk since 2007. Newton’s fund matches this through a use of diversified assets and is designed to perform well in poor equity markets.

The fund uses Newton’s global thematic investment approach across a range of asset classes, with the objective of returns with less volatility than equities and an emphasis on capital protection.

Saul chief executive officer Penny Green said: “We have found the thematic approach adds value in the equity mandate and we are confident that over a multi-asset portfolio the same will hold true.”

Iain Stewart, the manager of the fund, claimed it was suitable for final salary schemes wanting an alternative to equities and fixed income, but which were uncomfortable with the complexities of hedge funds.

He added the fund’s contrarian approach meant it had underperformed in the bull markets up to 2007, but outperformed in the bear market of 2008.