Russell Investments Dynamic Real Return Series

How we Invest

Our Dynamic Real Return funds are managed by Russell Investments’ global multi-asset team, which has a robust record in delivering long-term performance in multi-asset investing across traditional and alternative asset classes and strategies.

As an adviser to some of the largest institutional investors in the world, we have spent decades refining our understanding of long-term market behaviour through empirical research and direct observation. When you invest in one of our Dynamic Real Return funds, you gain access to all of this experience and expertise.

Investment approach

The funds in the Dynamic Real Return Series give investors access to traditional and non-traditional asset classes – including equities, fixed income, real assets, alternative yield sources, non-directional absolute return strategies and esoteric investment strategies – that may not be accessible to the average investor.

For example, your portfolio could benefit from:
  • long- or short-term absolute return strategies that do not depend on the underlying direction of the share market
  • volatility strategies that reduce the funds’ reliance on traditional equity risk premia
  • robust strategies that invest in quality high-yield credit securities
  • alternative yield sources, such as senior bank loans, that reduce exposure to rising interest rates
  • alternative real assets, such as global listed property, infrastructure and commodities
  • specialist insights into regional share and bond markets, including emerging markets, Asia, pan-Europe and Japan.

A history of navigating the market environment

This chart below illustrates how the Russell Investments Multi-Asset Growth Strategy Fund has navigated the changing market environment in recent years.

As investors enjoyed very strong double digit returns in recent years, buoyed by near zero interest rates and accommodative monetary policy, our strategist and portfolio management team have been anticipating and progressively preparing our portfolio for a lower return, higher volatility world over the last 12-18 months.

This has seen our exposure to listed growth assets reduce from 70% of the portfolio to around 40%. Early investors in the portfolio benefited from the higher allocation to equities during the rally in 2013/14 and are now prepared for lower returns and higher volatility through the defensive shift in 2015.

Along with increased allocations to strategies that are not reliant on the underlying direction of traditional equity markets, such as volatility strategies, these dynamic asset allocation decisions have cushioned the impact of significant market fluctuations since mid 2015 and early 2016.

Our exposure to defensive assets such as bonds and cash has also adapted in response to the outlook for interest rates around the world, with allocations to traditional bond and cash investments dipping as low as 5% and increasing to more than 35% at different times in the market cycle. In addition, we have diversified away from traditional government bond exposures to take advantage of opportunities in emerging market local currency debt and high yield debt markets where valuations are attractive compared to equities.

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