The Governed Range

Thanks for joining us for this chat on passive and active investing.

It's been the subject of much debate that is often reduced down to a very binary one of active versus passive, but we think that misses the point.

As soon as you decide to invest money, you make an active choice about where.

So isn't the question simply how active are you going to be?

So I'm sure a lot of people listening will have seen it get a little bit fiery on LinkedIn at times when the topic arises.

So when I was pulling together my questions, I've made sure to pull in some of those really common points as well as some questions from other financial planners to put to Trevor.

And as Royal London are a customer owned organisation, I'm hoping for this to be a really interesting perspective for financial professionals to hear.

So let's start with the obvious.

Passive has seen huge employers in recent years and for many has become the default choice.

So why not just go passive?

Well, we're quite hard line about this.

We'd like to say there's no such thing as passive in multi asset.

And what we mean by that is that if you have a customer that goes to see their financial adviser and they come with a very precise investment question, they might say something like, I want to get access to the US stock market.

What's the cheapest way I can do it?

You might offer them a tracker.

Most often customers that end up in a multi asset solution have a savings question.

They're saving for their retirement, they're saving for maybe school fees or for deposit on the house.

And they'll have a sort of idea of the fact they need to make some money.

They may have a risk tolerance, but they haven't told you anything more.

If you offer them a passive balanced fund.

We think you've made at least three active investment decisions.

The first is to say only stocks and bonds make sense.

You don't need anything else.

The second is to say fixed weights make sense, 60/40 or 70/30, no matter what's happening in the world.

And the third thing is you've decided that you think that the markets are valued correctly.

So you're investing in line with market capitalisations.

You'll have a big exposure to the Magnificent 7, for example, because they're there and because they're expensive.

And an active security selection, we think is also something you should be aware of.

OK, so that's very interesting and a good start and actually answers the title of this this session.

But Royal London, you said takes quite a hard line to it.

He talked to us a bit more about why Royal London remains so committed to their belief in active management.

Well, I mean, first of all, starting at the asset class level, there are some asset classes that we think makes sense in a diversified portfolio, like for example, commercial property or infrastructure where you have to be active.

I mean you have to own buildings and renovate them and find tenants and there's an active element than just the ownership.

And if you're all purely passive, you've crossed out those asset classes.

Secondly, we think you can analyse history, and you can see patterns in the way different assets perform around the business cycle.

And that's our investment clock approach.

And that to us also is something we believe we should be doing, we should be varying the asset mix depending on what's happening in the world.

And it's interesting you mentioned property because a lot of people were quite put off property due to liquidity concerns.

And I don't know many people are aware that Royal London actually can access property in a really advantageous way and have never gated due to liquidity.

And the fact I read very recently is that Royal London are one of the largest landlords in the UK of property.

So, and they're also one of the largest owners of commodities, which is another alternative inflation hedging asset class.

And most people don't realise that.

Well, hopefully they do now.

So let's burst some myths about active management, what it really means.

So there's often a misleading narrative in the market, something active means taking big risky bets and paying high fees.

So what is active management to you?

But it doesn't necessarily mean that you're taking more risk.

It might mean you're controlling risk better.

I mean, to start with diversification is a way of controlling risk with these additional asset classes that maybe you have to manage actively, you can be reducing risk.

And you've got to bear in mind, you know, a purely passive U.S. equity tracker will have 1/3 of its money in the seven big tech stocks.

That doesn't feel like low risk either.

So, risk and active versus passive, they're not the same thing.

Yeah, I think it's really important that is something of a narrative that is dropped because it is very misleading, this sort of high cost slash high risk versus low cost versus low risk narrative as a proxy for active and passive.

There was some research done for clients that showed that a large percentage of them associated passive with lower risk, which is just not true and could lead to quite poor outcomes.

So anywhere there might be lower cost but higher risk, there's not always lower cost.

Yeah, but a NASDAQ tracker versus something, you know.

So we started talking about cost there, which is a really important factor and it comes up in every debate.

So how are Royal London able to offer the actively managed Governed Range so cost effectively, particularly so the average advised value where we can see it's active at a passive cost?

Yes, so I think there are a couple of things there - we don't have additional mouths to feed.

So we like to access the asset classes where possible through in house manufacture and Royal London asset management.

So the equity funds we're using, the fixed income funds we're using, the property funds I mentioned… we have in house management.

So there's not an additional asset manager to pay and because we're a mutual that we don't have shareholders to pay either.

So I think that's how we can keep the cost down.

Yeah.

And for not having shareholders to pay, people will be very familiar with Royal London's ProfitShare, which is a pretty unusual for an investor to get money paid back into their fund, isn't it?

It is.

And some people have said in the past, you know, we could charge more for the products that we're managing.

Yeah.

But almost what would be the point?

Because if we were to charge more and make more profit, we'd be distributing more ProfitShare back to the members in the firstplace.

Exactly.

Yeah.

So, OK, let's get into a little bit more detail on the point that there is always a decision to be made.

So the question is how active are you?

So with that in mind, where do you think active adds the most value and where doesn't it?

Well, you can construct things in different ways.

So you can construct something where stock selection is the main driver.

Some of the sort of event driven hedge funds would do that.

You can construct different ways.

The way that we do it, I would say that we've got active management adding value on three different levels, strategic, tactical and security selection.

And people often forget the strategic asset allocation level, but for us it's an active discipline.

If you've only got stocks and bonds in your armoury and you've got a range of risk rated funds, the strategic asset allocation process is very straightforward and it's often part of product design.

It's kind of like fire and forget.

You just keep increasing your equity proportion and decreasing bonds because you've only got the two asset classes to invest in until you hit the right risk level and you stop.

And for the next fund up in the risk ladder, you increase the equities a bit more, you decrease the bonds a bit more.

And you've got almost no discretion.

When we're looking at building portfolios for a given level of risk, If we've got stocks and bonds, yes, but we've also got commercial property and commodities and high yield bonds and a big spectrum of different types of fixed income.

There are many, many different ways to build a portfolio to hit the risk target.

And so we factor in valuation, you know, when bond yields were zero, we had very low exposure to fixed income risk.

We factor in evolving scenarios, evolving risks.

So Donald Trump and the White House I think is an evolving risk for US equities and we can factor all of these things in and deciding a strategic asset mix and we don't try to be just like everybody else.

So sometimes we'll underperform a less diversified portfolio over long periods of time.

I think that broader diversification should help us to outperform.

But then the tactical asset allocation, we operate within quite wide bands there, overweighting or underweighting equities or bonds or commodities or different regions or sectors.

And then the underlying building blocks are all either trying to outperform through security selection or they're trying to do something to improve responsible investment.

Yeah, OK, that's it.

It's interesting what you say there about, you know, we don't want to be like everybody else.

That is very hard for me.

There's even a famous quote that says it's very difficult to be yourself in a world where people want to make you like everybody else.

I've got a question coming up on that actually about how that feels as a as an asset manager to be out of the herd.

So sticking with, I mentioned before pulling some questions from some of these chats that have been online 60/40 portfolios, you touched on those why and you've probably actually broadly answered it in what we've discussed.

But why don't you have one in the Governed Range?

Well, the way I look at it, I would say we're we have funds that try to achieve the same investment objectives as a 60/40 balance fund, but we do it through a broader asset allocation approach.

And the year where that really showed to the benefit of being more broadly diversified was 2022.

So in 2022, broadly speaking, global equities to a sterling investor were down about 7%, but Gilts were down 24% and you had nowhere else to hide.

The whole range of funds was exposed either to one or the other or a mixture of the two.

But that year commodities were up 30 and UK equities were outperforming.

So there are kind of, you know, times when being less diversified is better.

It was taken to an extreme.

There are times when the NASDAQ tracker looks better, but there are times when it would look a lot worse and the risk level you're taking on is too high.

Yes, I, I described when I've been talking to clients of it, like going on a long holiday over a year, what you would pack in your suitcase - if you were just packing for July, it would look very, very different to what it would look like for the whole year.

So I refer to that portfolio as a really well packed suitcase.

You can use that Trevor.

Yeah, so I was really interested when you were talking about fixed income.

We get asked about this a lot and you know at Royal London, we know believe it's an area where you have to be active and it really adds value.

Could you talk to us a bit more and give us some examples of why you believe you have to be active in fixed income?

Yeah, so part of the reason to include fixed income in the portfolio is it's a store of value.

Part of it is to benefit from what's called the term premium.

So that's where you tend to make better returns through longer duration bonds.

Those sorts of things you can access through government bond markets.

But there's also then the credit premium, you know, by lending effectively and taking some risk, you'd expect to do better on average than government bonds.

That's what history certainly shows that if you're taking more credit risk, you tend to get a better return because of the credit spread.

And there are many, many ways to diversify your credit exposure in high yield bonds, in international government bonds, emerging market corporates, asset backed securities.

There's a big spectrum of different ways of investing fixed income and I always like to remember that in credit markets in particular, security selection isn't about the stocks you own.

Did you get the NVIDIA?

It's about the ones you didn't own.

You know, because a good bond is a bond that just pays you the money back.

They pay you the interest they said they would pay you.

So almost boring is good in fixed income and it's avoiding the blow ups and a tracker will always be exposed to the big blow ups in size.

I remember actually the team talking about, you know, negative yielding bonds on real terms.

Yeah, a couple of years ago and showing some examples and we said we wouldn't do that with our own money.

So we wouldn't lend somebody money knowing that we would get less back.

So we don't want to do it with other people's money so we can choose to not.

Whereas you know if you've gone passively into bonds, you are forced to buy that.

And I think this was the problem with 2022.

It seemed to me really risky to invest for a low, a low risk investor, 80% of the money in long dated bonds when yields for zero.

You know, people talk about the, the government bond market being, you know, risk free return.

And the saying was at that stage it was return free risk because you saw what happened.

I mean, people lost half their money in some of those government bonds and they were baking in a negative real interest rate.

I mean, the, the ironic thing is that during that, Government should have been issuing bonds and expanding fiscal policy because they were being paid to borrow.

We didn't want to be on the side of that where we were actually, you know, paying to invest before we make a return.

Absolutely.

Another area where it can be very challenging to not follow the herds because they think the larger the group that come down and people say, well, it's markets they couldn't have known.

Whereas when it's your decision, it's psychologically a difficult place to be.

We've seen a lot of fund managers talk about this.

It's pretty fascinating.

So I'm going to stick with the more controversial questions that I've seen raging online and move into equities, another big one we see in those debates.

So why don't you just follow market cap weighting on your global equity?

So, we tend to look at global equities as an asset class in terms of UK equities, which is the home market, but it's also a market that offers lots of lots of value and resilience to inflation.

Look at global equities, which is very dominated by the US and emerging markets.

We would expect emerging market equities to offer you slightly better return for slightly higher risk in the long run.

The UK versus global equities choice is about trying to get more inflation resilience but having more UK equities in the mix.

The UK was actually the best performing market globally in 2022 of the developed markets because of its inflation resilience, but also the value that you get.

And if you look at America at the moment, the US stock market's only been more expensive in late 2021 before it had a bear market year in 2000 before the.com bubble or all the way back in 1928 before the 29 crash.

So the US market at the moment is really expensive.

It's priced for perfection.

It's off the back of really strong technology based earnings, which may carry on, but some of those technology earnings could be a kind of capital spending bubble.

You don't know.

And then on top of all that, you've elected Donald Trump, who's pressing all the buttons and pulling all the levers.

And as a strategic investor, we're very happy not to have the market capitalisation weights in US equities because value is the best factor in determining medium to long term returns.

And the US is expensive.

And then you've got all these additional risks that five years ago no one would have dreamt up.

Yeah, but people really forget that, surprisingly, because it is one of the most basic tenets of investing.

The growth is the difference between what you bought it at and what you sell it at.

You know, it's as simple as that, isn't it?

So I think and that continues to cause quite a big challenge for investors.

Well, it does.

And, and the thing is people can be a bit short term and, in terms of tactical asset allocation, momentum is a more rewarding factor usually than valuation.

So if it's going up, buy it, and our tactical asset allocation, we look at the investment block, but we also look at momentum because sometimes the market knows something.

And if the US market's surging, it's possibly a reflection of how well the technology companies are doing.

Yeah.

But on a 5 or 10 year view, the only factor that really works is value.

Yeah.

And that's where your strategic asset mix comes in.

Yeah.

So particularly we see that momentum, it's damaging for individual investors because when we look at fund inflows and outflows, they're not going in where they were the ones that made that, that made that growth.

We see it time and time again.

It's going in and out at those wrong times.

So yeah, let's talk about adapting to the world ahead.

So active isn't about prediction or guesswork, which is another myth that's often floated.

It's about trying to predict the future.

It isn't. but nor is it about assuming that the past is going to look exactly the same.

Sorry, the future is going to look exactly the same as the past.

We know that passive has been helped by an extraordinary period…

Do you think confidence levels are high that the next 10 years is going to look similar to the last?

Yeah.

So, I'd start the question thinking about strategic asset allocation again and the 80s and the 90s, most of the early 2000s, which is where we saw this big growth of passive investing and in the last 10 years of that, the big growth of passive balanced funds.

The main story there was inflation falling from the 70s.

So you had inflation falling, you had a lot of structural factors helping inflation to fall, including the fall of the Iron Curtain, the change of China from an agricultural communist economy to the workshop of the world when the joint World Trade Organisation, these are all disinflationary forces.

And you had the creation of a lot of independent central banks.

When you've got inflation falling, it's good for government bonds and it's generally good for stock markets as well, particularly for growth stocks.

So the US market technology, if you've got falling interest rates, you're discounting all that growth at a lower interest rates worth more to you today.

So, I think that the disinflationary decades after the 1970s were great for balanced fund investing.

For most of that time, it was diversification.

Right now, I think we're back in a more uncertain world, and I think you're going to see spikier inflation.

So suddenly you've got tariffs, which are inflationary, You've got net zero, a reduction in fossil fuel investment.

That's inflationary, has to happen, but it's inflationary.

You've got a lot of populism, very high debt levels.

And with COVID, you saw what that means.

When you get a problem like COVID, central banks and governments throw money at it, and that does create inflation.

When you've got more inflation, you get more years like 2022 and stocks and bonds both do badly.

You need that broader diversification.

And that's why I think that the balance fund investing doesn't have the tailwind that had.

If anything, it's got a headwind.

Yeah.

And I've seen your charts on that where because there's a lot of charts about that correlation being quite insignificant and not happening very often.

But I saw that was not on a nominal basis and you redid those numbers on a real basis, which is what people need - real money to live in the real world.

So they do so after 2022, one of the big passive managers in the world put a post on LinkedIn, which was a scatter plot, and it showed that they've been only four years since 1928 when U.S stocks and US bonds had both fallen at the same time.

But yeah, it wasn't adjusting for inflation.

If you asked the question differently, if you said are there years where stocks didn't keep pace with inflation and bonds, didn't keep pace with inflation, they're about 30 years.

And then there are the years like the mid 70s and the late 70s or the late 80s or 1994 or 2022.

And these were all inflation shock years.

So, yeah.

And the balanced funds do best in long periods of disinflation.

And I think those are probably behind us.

Yeah.

So when we're talking about it being an active decision about where you invest, really somebody is now saying for the next 10, they believe that we'll continue as we've been, that we're not going to see inflation shocks.

And that's OK. I think all of these, you know, there's no, if there was one way, then we'd be invested in the same place.

But it's more, that it's an intentional decision is what we're saying to decide that.

And we don't believe that's the case.

We yeah.

And I think the valuation also matters because, you know, the 10, 20, thirty years ago, the US stock market wasn't trading 36 times cycle adjusted earnings.

And so to say that you're going to see the same again and it's going to start from a starting point of these eye watering valuations.

That's, that's quite a big assumption to make.

Yeah, which is interesting when active is considered the, the style that makes all of the guesses and assumptions.

But it does absolutely, as you said, still exist.

Well, you know, the passive funds thinking not too much about passive balance because we didn't exist, but the passive track of funds for equities really fell out of favour after the.com crash because they underperformed active managers in many cases because they had such big exposures to these very expensive mega cap stocks.

And you had you had to own more of them because they were getting more expensive.

Yeah.

And we've probably covered this a little bit throughout this chat.

But you know, I've heard you say in the past that we don't try to predict the future, but we can tell the time today.

So can you explain how you do that in practise?

So I don't think the stock markets know what's going to happen next.

What they do though is, is as the pitch gradually changes, they move a bit in that direction and they reserve the right to change their mind.

You know, if something looks like it's improving, the stock market goes up and when it turns out to be bad, the stock market goes back down again.

And, we think you can actually add value as an active manager by gradually moving the portfolio as the picture emerges.

So we call that now casting, it's not forecasting, it's what's happening now.

And the investment clock is one way we do that.

But looking at growth and inflation trends can help you with this gradually changing your portfolio as the global backdrop changes.

We think that makes a lot of sense because it means that, for example, if you enter a period with surging inflation, you can be invested in commodities but overweighted in commodities as that information starts to come through.

Yeah, and I know there's some big fans out there of the investment clock approach.

And I've described - when we talk to advisers who are speaking to their clients - you know, to talk about active and sometimes explain that we are really comfortable using it in lots of other areas of our life.

So it isn't actually this big deal.

We use it in most time on any long car journey.

I say people will put their live (can't use any brand names) navigation system.

So if I was driving to London, I might know the route, but things can change while I'm on the route and I might want to make a little adaption rather than say, well, that was the most efficient route.

I will if it tells me to take an exit because there's been an accident.

Same with pilots.

I think they know the route.

There's a set route they'll fly.

But if on the way they don't just have a nap, if on the way they hit some turbulence, we'd expect them if they could make a slight adjustment to avoid it.

So there's real comfort with that in other areas of our life.

And a lot of what we're talking about is that same philosophy really, isn't it?

Isn't it?

Yeah.

You know, do something. They want to take the controls.Yeah.

You've got to be careful because there are behavioural traps you can fall into as an active investor.

I mean, there's a human tendency to want to sell after a crash.

I mean, every adviser listening to this will have heard that many times with their customers.

And there's also a human tendency to buy at the top, you know, if it's going up, everyone wants it.

And so you've got to build into your, your research LED framework ways to counter that behavioural trap that you fall into.

But, as an active investor, we think that the journey is as important as the destination.

Yeah, there are ways of improving it.

Yeah, absolutely.

Because we want people to feel good throughout their investing journey.

We've been doing a lot of work on that as well as, you know, because we talk about, and we're talking about it today, we're talking about the resilience we build into portfolios.

But we also think it's really important that you've got to build that resilience into people.

Yeah.

So that's what we love working with.

And we do work via intermediaries because that's a huge part of the job and the role that they play is helping this behavioural side and building that resilience into investors by helping them be aware of these traps.

So we've got some interesting stuff coming up on that actually.

But for now we won't let you off the hook just yet on the tough questions.

You mentioned the Magnificent 7 and clients do ask about the Magnificent 7 and the concentration they have in it.

So one of the research companies had had raised this.

So firstly, what's your answer to that?

If if the clients that were worried about that concentration?

And secondly, and we've just touched on this really, but do you feel pressure to chase trends in what's hot in more broader terms as well?

Yeah, we got asked about, you know, why aren't you investing in Bitcoin and this sort of thing.

You know, we set the bar quite high to include an asset class that needs to have enough history that we can understand what the return over the long run should be and how it behaves as the business cycle evolves.

But with the Magnificent 7, as they become known, it does remind me of the.com boom.

And I have to say to people that between 2000 and 2003, you lost about half your money in equities.

And if it was a technology stocks, you lost more than half of your money.

And nobody uninvented the Internet - dot coms are here. You know, everyone's got a website now.

But the companies themselves are overvalued.

There's a difference at the moment in the sense that the companies aren't just a hope that they're making a lot of profit, But I'm a bit nervous about how much profit they're making by selling things to each other.

And that again, is a bit like the late 90s in the European telecom sector where they were all selling each other pieces of kit.

And someone explained it to me this way.

They said if if Microsoft buys $100 million worth of chips from NVIDIA marks up a $90,000,000 profit because they have a 90% profit margin.

Microsoft doesn't say they lost that 100 million.

They say they invested it and the accountants allow them to spread the cost of that over a period of years.

So they might only book a cost of 10 million.

NVIDIA has booked a profit of 90 million.

And so net, they're up 80 million.

All that happened is one company bought something from another company.

And when you've got a big sort of arms race of spending around artificial intelligence, we don't know how much of this is something you can extrapolate into the future and how much of it is this sort of building an infrastructure quickly.

And it's so there might be some bubble elements doing as well as some real trends.

And I think that's why you need to be a little bit careful.

And again, look at the valuation.

Yeah, absolutely.

That's interesting.

And I've seen Ed Conway report on, you know, some of the risks around some of the raw materials that are needed to produce some of this.

And he talked about what happened with some of the quarries during some of the severe storms we had.

So I guess it just speaks to everything you've been saying as well about why we don't want to be concentrated too watching any one thing, even if it does look like something might continue doing well.

We don't want to take that risk with people's money.

No, you don't put all your eggs in one basket.

And we're a few more minutes heading towards the end of this chat.

Now, we've seen a lot of managers move towards alternatives lately, which we were just starting to talk about there.

Why do you think that is?

Well, for me, the alternatives start with anything except stocks and bonds.

So, you know, we've always had the commodities in there, been in the governed range since 2016.

They've been in the GMAP range since they launched in 2016.

So we've always had that.

That liquid alternative commercial property has been a mainstay again since the launch of the governed range in 2009, which is another form of private asset and it's an alternative you'll have seen recently the acquisition of an infrastructure manager and that will allow us to include some infrastructure asset classes.

So we think it's important to have that kind of broad diversification and there's a trade-off that you don't want to take too much illiquidity risk.

So again, that's something you always have to bounce up in your mind.

But having that diversification helps.

And UK commercial property is quite well valued at the moment.

It's not expensive.

It's offering a yield of 6 or 7%.

And if you were to enter a period where stock markets were struggling because they became too expensive, the commercial property market could just keep plodding on and that would be really good diversified.

Yeah.

And they've got, is it five-year reviews, inflationary reviews to go up to what to meet that as well.

So, you know, there's some brilliant features in that asset.

Rent reviews, yeah.

So they're usually up but only rent reviews.

And there's an inflation protection built in and, and people don't quite appreciate that.

If you were to track the performance of UK commercial property against either UK or global equities from the late 1980s, actually property was ahead of equities until the Liz Trust mini budget.

And then it kind of fell a bit because interest rates went up and a lot of foreign buyers left the market and stock markets have jumped.

But actually over most of that property was more or less keeping pace with equities.

Yeah, I've got the benefits haven't changed a property.

It was the drawbacks that changed and got more difficult.

But anything, if you can access these benefits and reduce the drawbacks is going to be attractive.

I guess so.

And I wanted to ask you as well, you know, the government range is a range of portfolios because they're not sharing a space on the same system as MPS, they're often not considered in that cohort, which they're very similar to.

But what is it that you think makes the government range different from other MPS and off the shelf models?

Well, I think you've got some of the benefits of model portfolio solutions, particularly if you take advantage of some of the customisation you can do as an adviser with the government range platform.

I would say that a lot of model portfolio solutions tend to be under diversified because it's very difficult to earn a less liquid asset class like commercial property in an MPS because rebalancing it becomes cumbersome.

There's a lot of costs of buying and selling to rebalance that you might just let the waiting drift in a fund and you can't get the daily risk control or tactical asset allocation typically in an MPS.

So I think actually fund solutions like the governed range are more sophisticated with a broader range of investments and more risk control.

Yeah, we talked about herding.

So just sort of heading into my last question now and I said I would come back to this.

But due to the way they're designed, the governed portfolio range doesn't herd with the majority of other MPS and multi asset funds.

So how do you help financial professionals explain this to their clients, especially when that performance envy is creeping in?

At those times when the cycle favours it, we'll focus on the customer outcomes.

So, so we're trying to maximise the return after inflation.

We're given level of risk.

We take the after inflation bit seriously.

So we've got more inflation hedges in the portfolio than you might get with a passive solution.

And we're investing over the long run and the diversification doesn't always show up over the short run.

So we focus people on the long run, on the outcomes we're trying to achieve and the mix of asset classes we're using.

And we don't focus too much on short term performance.

We think, you know, things like valuation, they play out over 5 or 10 years, they don't play out over 5 or 10 months.

Yeah, that's really important, that holding period.

And I think that will become increasingly important in post consumer duty when we are looking at outcomes.

Again, there was some research that was talking about firms looking at their holding period for their equities and you would want it to match, but they were seeing it was happening maybe 1-2 years and people were switching, but then saying that didn't match their capacity for loss.

So I think that's one of the things we might start to see in firms looking at what are the holding periods of their longer term investors and why they're moving.

So that was very interesting.

Thank you very much.

And I guess the other thing about the long run is, is costs matter.

So while we believe in active management, we believe in diversification, we think you should be thinking about investment clock in the business cycle.

Cost also matters and it compounds over time.

So if you can come up with a cost effective active solution, I think that's the best of both worlds.

Yeah, fantastic.

Well, thank you very much, Trevor for your time there.

I hope that people will find that perspective very interesting.

And I think we can confidently conclude from this very scientific journey of discovery that in our opinion, there is no such thing as passive in multi asset.

Thank you very much, Trevor.

Thanks everyone.

Thank you.