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IHT clients are getting younger, but advisers believe many are still too late in their planning
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Downing launches new actively managed liquid alternatives fund aiming to deliver 7% to 10%+ per annum and positive returns in most markets. The new MGTS Downing Active Defined Return Assets Fund (‘Active Defined Returns’, the ‘Fund’), is the first fund from its new Liquid Alternatives team.
The Fund is aimed at institutional investors, Discretionary Fund Managers, IFAs and advised sophisticated individual investors, and will primarily consist of UK Government bonds and large-cap equity index options, which provide significant scalability and strong liquidity. It aims to deliver 7% to 10%+ per annum and positive returns in all markets except for a sustained equity market fall (generally more than 35%), over a period of at least six years.
The Fund is the first to be launched by the new Liquid Alternatives Team established by Downing. Collectively, the team has over 125 years of experience and sector knowledge, and includes Tony Stenning, who held senior roles at BlackRock and most recently was CEO of Atlantic House Group; Russell Catley, founder and also a former CEO of Atlantic House Group; Huw Price, a former Executive Director at Santander Asset Management, and Paul Adams, former Head of Cash Equities and Derivatives Sales, Royal Bank of Canada.
The Fund offers investors a compelling building block for multi-asset portfolios, aiming to add consistent and predictable returns, typically secured with a portfolio of UK Government bonds. The unique proposition includes a hybrid approach of using systematic derivative strategies and active management, combining liquid investments with predictable returns, and an equity like risk profile.
Investment strategy: Maximising the probability of delivering predictable defined returns across the economic cycle.
Systematic Liquid Derivatives: Systematic, derivative strategies optimise the equity risk-return profile. The Fund uses rules-based derivative strategies linked to the most liquid, large-cap global equity indices (i.e. FTSE100, S&P500) with the aim of harvesting well-proven consistent returns across a wide corridor of market conditions.
Strong security: The Fund will hold a high-quality portfolio of assets as secure collateral – typically UK Government bonds.
Active benefits: At times, rules-based, passive derivative strategies can underperform when markets move strongly – this is when specialist active management can add incremental gains by monitoring and monetising positions and applying active risk management.
Key benefits
Increased consistency and predictability of returns: Positive returns in all markets except for a sustained equity market fall of more than 35% over at least six years.
Diversification of risk: The Fund’s risk components are diversified across large, liquid equity indices, observation levels and counterparties. Secured with high-quality assets – typically UK Government bonds.
Active management: Our experienced team will actively manage the Fund and its investments to optimise risk and reward for investors.
Russell Catley, Head of Retail, Liquid Alternatives at Downing, said: “Put simply, we focus your investment risk on the probability of receiving the returns you need, not those you don’t. We target the highest probability of delivering 7% to 10%+ per annum with active management adding material incremental gains. We believe that we are building the next evolution of the proven success of Defined Returns funds
The Downing team isseeing strong demand from clients looking for alternatives to large-cap equity funds which are becoming concentrated in technology stocks, or alternatives to UK equity income funds and illiquid alternatives.”
Tony Stenning, Head of Liquid Alternatives at Downing, said: “The launch of our Active Defined Return Assets Fund is a significant milestone in the ambitious build-out of our new Liquid Alternatives strategies. It is a solution-focused fund that should deliver stable high single or low double-digit returns across a wide spectrum of equity market conditions, except for a persistent multi-year bear market. The Fund is designed to enhance balanced portfolios by providing consistent, predictable returns and is suitable for accumulation or drawdown.
“We aim to deliver a unique combination of proven systematic derivative strategies and specialist active management, and we are doing so at a very compelling fee level, below our closest competitors and in line with active ETFs.”
How the Fund is expected to perform in different markets
In bullish markets: UK Government bonds secure the capital, and the equity index options deliver a predictable 7-10%+ return per annum – giving up some less likely upside.
In neutral markets and normal market corrections: UK Government bonds secure the capital, and the index options deliver a predictable 7-10%+ return per annum.
In a sustained sell-off: if markets fall more than the cover to capital loss and do not recover for six years. Then capital is eroded 1:1 in line with the worst performing index.
The average Cover to Capital Loss is targeted at 35%: the average cover to capital loss represents the average level the Global indices within the Fund could fall before capital is at risk.
Fund key risks
Performance: Capital is at risk. Investors may not get back the full amount invested.
Liquidity: Access to capital is always subject to liquidity.
Counterparty risk: Other parties could default on the contractual obligations.
Fund Structure
UK regulated OEIC fund structure, fully UCITS compliant
Daily dealing, at published NAV
Minimum investment: £100,000
SRRI: 6 out of 7
Depositary: Bank of New York
Authorised corporate Director (‘ACD’): Margetts Fund Management Ltd.
I share-class: SEDOL: BM8J604 / ISIN: GB00BM8J6044
F share-class: SEDOL: BM8J615 / ISIN: GB00BM8J6150
Risk warning: Opinions expressed represent the views of the fund manager at the time of publication, are subject to change, and should not be interpreted as investment advice. Please refer to the latest full Prospectus and KIID before investing; your attention is drawn to the risk, fees and taxation factors contained therein. Please note that past performance is not a reliable indicator of future results. Capital is at risk. Investments and the income derived from them can fall as well as rise and investors may not get back the full amount invested. Investments in this fund should be held for the long term.
Important notice: This document is intended for professional investors and has been approved as a financial promotion in line with Section 21 of the FSMA by Downing LLP (“Downing”). This document is for information only and does not form part of a direct offer or invitation to purchase, subscribe for or dispose of securities and no reliance should be placed on it. Downing does not offer investment or tax advice or make recommendations regarding investments. Downing is a trading name of Downing LLP. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference No. 545025). Registered in England and Wales (No. OC341575). Registered Office: 10 Lower Thames Street, London EC3R 6AF.
Inheritance Tax (IHT) and estate planning clients are getting younger as demand for support surges, but advisers worry clients are still engaging with the issue too late, new research* from investment manager Downing shows.
Its nationwide study found 84% of advisers and wealth managers say the average age at which clients first contact them about IHT and estate planning has fallen over the past year.
That includes more than a quarter (27%) who say the average age has dropped considerably, as interest in IHT and estate planning has increased.
However, despite clients beginning IHT and estate planning conversations at a younger age than they were a year ago, more than two out of three (67%) advisers believe clients still engage with the issue too late in general.
Advisers themselves state that, on average, they begin engaging clients on estate planning when the client is 46 years of age. However, 39% of advisers say they begin engagement when the client is past 50.
The research found that advisers and wealth managers estimate more than a quarter (27%) of their client base has a potential IHT liability currently and 42% say they proactively contact clients about IHT and estate planning.
A further 32% say they rely on a combination of proactively contacting clients and waiting for clients to raise the issue, while 26% leave approaches on IHT to clients.
Downing’s research asked advisers what the biggest gaps in clients’ IHT and estate planning are - nearly half (47%) of advisers say clients are unaware of the need for IHT and estate planning.
Around two out of five (39%) said clients are unaware of the upcoming inclusion of DC pensions in estates, while 35% said clients have limited awareness of how trusts can be used as part of wider estate planning strategies to pass on wealth efficiently and potentially mitigate inheritance tax liabilities. A further 31% said clients do not have wills.
Rebecca Ward-Howes, Head of Product at Downing, said: “The biggest risk in estate planning is often delay. That risk is only growing: Business Relief reforms are already changing the picture, and from April 2027, unused pensions will be pulled into the IHT net for the first time, catching out many families who assumed their pension was safe from IHT. It’s encouraging that clients are engaging with advisers earlier than before but our research shows many are still waiting until their options have narrowed. As more families find themselves exposed to potential IHT liabilities, early engagement and clear planning have never been more important.
At Downing, we’re focused on giving advisers the tools to model these complex scenarios with confidence, and communicate outcomes to clients in a compelling, accessible way.”
The company has expanded support for advisers with the launch of a free IHT calculator available via Downing’s Adviser Hub, which enables users to view estimated IHT liabilities, including the impact of Business Relief reforms, which came into effect from 6 April 2026, and the inclusion of unused defined contribution pensions within estates.
This press release has been approved and issued as a financial promotion. Capital is at risk. Downing is a trading name of Downing LLP. Any personal opinions expressed are the views of the Downing representative at the time of publication and are subject to change and should not be interpreted as advice. Downing LLP is authorised and regulated by the Financial Conduct Authority (Firm Reference No. 545025). Registered in England and Wales (No. OC341575). Registered Office: 10 Lower Thames Street London EC3R 6AF.
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