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Morningstar Launches Discretionary Managed Income Portfolios for UK Market

Morningstar Investment Management Europe Ltd, part of the Morningstar Investment Management group, today launched two income portfolios as part of the Morningstar OBSR Managed PortfoliosTM service. 

The Morningstar OBSR Managed Portfolios service, a discretionary fund management offering for the UK market, now offers a Moderately Cautious Income portfolio and a Moderate Income portfolio alongside its existing active and passive range of portfolios. The new portfolios draw on Morningstar’s global investment and manager research capabilities to create a unique approach to income-focused investing that combines market leading multi-asset investment techniques with a focus on the stability of the income stream. Both portfolios will aim to target regular, reliable income for the UK market.

“Traditional asset allocation models are poorly suited to building income portfolios,” Dan Kemp, co-head of investment consulting and portfolio management, EMEA, for the Morningstar Investment Management group, said. “Because they use the same capital market assumptions and optimisation process for both growth and income portfolios, traditional models do not consider the ability of the portfolio to deliver a sustainable income and can lead to investors overpaying for high-yielding assets. Using bespoke capital market assumptions and an optimisation approach specifically designed for income investing, we have created completely new income portfolios that aim to meet investors’ increasing need for a sustainable income.”

The Morningstar OBSR Managed Portfolios are actively managed by the Morningstar Investment Management Europe portfolio management team, supported by investment consulting professionals in London and Paris. Actively managed funds included in the income managed portfolios are expected to hold a Morningstar OBSR Analyst Rating, where an appropriate rated fund is available for selection. The portfolios utilise the expertise of Morningstar’s affiliate, Ibbotson Associates, for its asset allocation expertise and draw on the manager research expertise of the company’s 100 manager research analysts located across Europe, Asia, Australia, and North America. 

The Morningstar OBSR Managed Portfolios service launched in May 2013 with five risk profiles: Cautious, Moderately Cautious, Moderate, Moderately Adventurous, and Adventurous.