Fund overview
The investment objective and policy of the fund is to aim to achieve the capital return of the FTSE® World US Index by investing primarily in the securities that make up the FTSE® World US Index. The fund is competitively priced to offer a low cost index tracking solution for clients.
Manager
Symon Bradford joined the RLAM Quantitative team in 2004. He is responsible for the management of the US passive funds. Symon has worked in quantitative investment management and research for over 20 years, previously holding roles at M&G, Wood Mackenzie/NatWest Securities and Tilney Investment Management. He has sat on several index committees and was one of the originators of the FT Actuaries World Indices.
Investment approach
The fund manager uses an optimised portfolio to track the capital return of the FTSE® World US Index. We take the view that full replication may result in too much costly trading, which could outweigh the benefit of perfect replication.
We use an optimiser to help construct a portfolio designed to track the performance of the benchmark without necessarily holding all the constituents in their exact benchmark weights. The optimiser uses an algorithm which minimises tracking risk, based on a multi factor model and associated covariance matrix.
In practice, the Royal London US Tracker Fund holds most of its benchmark's names as well as having holdings in futures and cash.