The active fund that can invest anywhere, anyhow

It's an unfortunate reality of markets that growth goes hand-in-hand with volatility. 

If you want the rainbow, you have to put up with the rain, to quote Dolly Parton. 

But what if you could get real returns without the risk of big drawdowns?

That's what the Schroder Real Return Active ETF (ASX: GROW) is aiming to do.

The fund is targeting a return of the CPI (consumer price index) plus 4-5% p.a., before fees, over a rolling three-year period. 

To achieve this, it uses a multi-asset approach that combines active asset allocation with Schroders Australia's long-standing experience in bottom-up stock selection, says Schroders' Head of Multi-Asset and Fixed Income, Sebastian Mullins.

The fund also employs Schroders' VCL (value, cycle and liquidity) framework to inform its investing decisions and asset allocations. 

It can invest in anything from local and global equities to fixed income, bonds, forex and commodities to help generate a balanced return.

"We have the ability to go anywhere, anyhow."

The aim isn't to "shoot the lights out" like other equity-focused growth funds, but deliver solid growth with minimal drawdowns.

This makes it a convenient way to diversify your portfolio and manage downside while still remaining actively invested. 

"Because we focus on minimising losses, it can diversify well against another portfolio that's more growth-orientated," says Mullins.

"It's a very nice compliment to a high growth or an equity allocation in a total portfolio," he said. 

The fund explicitly aims to minimise drawdowns and volatility by responsively dialling its risk levels up and down in a way that passive investors can't normally manage.  

Mullins points to their decision to scale down from 45% equities exposure in late 2024, to mid-twenties ahead of Liberation Day, or using options to hedge against the market moving against them.

One other benefit is the liquidity it offers to investors as an ETF. 

If equities fall, not only does GROW potentially help protect you from the drawdown, it also makes it easy to redeem and redeploy your capital elsewhere to take advantage of any recovery. 

"Minimising those drawdowns helps you sleep at night, helps you keep your allocation invested, but also allows rebalancing back to other funds that might do poorly in those sort of market shocks," said Mullins. 

Unlock potential to grow your wealth

By investing across a broad range of asset classes, GROW aims to achieve its return objectives with lower volatility of returns. Find out more by visiting the Schroders website or the fund profile below.

ETF

Schroder Real Return (Managed Fund) (GROW)

Multi-Asset

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