Digital wealth manager Moneyfarm has launched an absolute return strategy to target positive returns across market cycles while limiting volatility and losses when markets fall.
The multi-asset portfolio will be actively managed by Moneyfarm's asset allocation team, which can use a range of investment strategies in pursuit of gains during different market conditions.
It will combine equity, fixed income and currency strategies designed to perform in both rising and falling markets. Moneyfarm said this is intended to provide a diversified source of returns that is less dependent on traditional market movements.
Moneyfarm recommends an investment horizon of three to six years for the product. Within its range, the strategy sits between cash-based solutions and higher-risk growth investments, designed to complement rather than replace a core portfolio.
The launch responds to geopolitical tensions, shifting interest rate expectations and market volatility. Moneyfarm said these conditions have left some investors wary of traditional markets while reluctant to hold cash for long periods.
Chris Rudden, head of investment consultants UK at Moneyfarm, said: "The absolute return strategy has been designed to help address this challenge by offering a flexible, diversified approach that seeks to generate returns across different market environments. It provides clients with another way to stay invested while reducing their dependence on the direction of traditional equity and bond markets.
"As investors seek greater diversification and resilience, we believe absolute return strategies can play an increasingly important role alongside traditional portfolio allocations. This launch is another step in our mission to help clients build long-term wealth through a broad range of accessible, transparent and professionally managed investment solutions."
The absolute return strategy joins Moneyfarm's existing range of managed portfolios, sustainable investing options, pensions and cash alternatives. It follows the earlier launch of the firm's enhanced yield solution.