Many DFMs have their performance measured, whether they like it or not, in reference to the Pimfa indices, but Robeco has launched a solution which violently disagrees with this approach.

The Dutch company has released a multi-asset solution called Robeco Flexible Allocation. 

Unlike many portfolios, which are measured in reference to a defined benchmark, the strategy aims to achieve cash plus 4 per cent on an annual basis and it has freedom to do pretty much whatever it likes to achieve this.

Indeed they said that it will "not necessarily follow the usual ‘60-40’ multi-asset mix”, instead offering a far more active and dynamic view in terms of allocations across the spectrum of in-house funds.

This launch is pretty timely, given the Fed has finally begun to cut rates and the battle against inflation is thought by many market participants to be won, however it’s good to see allocators taking real returns into account. 

We also suppose this frees Robeco from being constrained by a defined risk profile by being pigeonholed into certain return expectations - though it will aim for a risk range of between 6-12 per cent volatility.

Its equity exposure could be anywhere between zero and 75 per cent, the team said. 

Indeed at the moment the fund has a 74 per cent allocation to fixed income with 20 per cent in equities (and the rest in cash and alts).

Colin Graham, head of multi asset strategies at Robeco, said: “We believe our clients don’t start their investment journey with a benchmark, but with an investment goal. Therefore, the central focus of this is achieving an annual return of cash plus 4 per cent return at a medium risk level."

Jon Arthur, client portfolio manager for the new strategy, added that this unconstrained approach is particularly favoured among Asian investors who, he said, “tend to have less of a preference for benchmark-type approaches as they don’t want the benchmark to be used as an excuse for performance.”

Once this strategy gets fully off the ground, we’ll be checking in to see what it actually comprises, but until then we can at least speculate that it won’t contain too much in the way of UK equities. 

Last month Robeco’s wider multi-asset team dropped their overweight to domestic stocks as they saw Keir Starmer’s election honeymoon as coming to an end. You can read more about that here.