T.Bailey shows confidence to deliver
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UK Best Ideas Fund
Type: Oeic fund of funds
Aim: Growth and income by investing mainly in UK equities through 10 investment funds
Minimum investment: Lump sum £1,000, monthly £50
Investment split: 10% F&C UK Growth and Income, 10% Invesco Perpetual Income, 10% Jupiter UK Growth, 10% Legal and General Growth Trust, 10% Old Mutual UK Select Mid Cap, 10% PSigma Income, 10% RAB UK Dynamic, 10% Rensburg UK Managers Focus, 10% Saracen Growth and 10% Schroder UK Alpha Plus
Charges: Initial 5%, annual 1.5%
Special offer: Initial charge waived
Offer period: Until December 31, 2007
Commission: Initial 3%, renewal 0.75%
Tel: 0845 130 0005
T.Bailey’s UK best ideas fund of funds invests in an equally weighted portfolio of 10 concentrated funds where the underlying managers are unconstrained by benchmark weightings and choose only their best 25-50 stock ideas.
Bright Financial Services sales director Paul Breaks points out that the fund’s aim is to outperform the FTSE All-share Index on a total return basis over three-year periods while achieving first quartile status in the IMA UK All Companies Sector also over three- year rolling periods. “While putting itself in a position to be shot at it also shows T.Bailey has confidence its ability to deliver,” he says.
Unlike most other best ideas funds, it will be structured as a fund of funds and not a manager of managers solution. Breaks says: “T Bailey believes this approach delivers better long term returns as it is more flexible, being able to react more quickly to market circumstances and allow it to replace underperforming managers more expediently.”
Breaks mentions T.Bailey has researched the IMA UK All Companies Sector, finding that over the year to July 31, 2007, fund of funds outperformed manager of manager funds by 2.3 per cent. Over three years, the outperformance is extended to 5.26 per cent.
“The fund could be called the T Bailey conviction fund as in essence it is down to its judgment as to which funds should be included. It presents its case by reference to the Saracen growth fund, which T.Bailey first invested into in Sept 2004. This has been a first class performer,” says Breaks.
Breaks also observes that T.Bailey was the first non-Standard Life investor to gain access to the top performing Standard Life UK equity unconstrained Fund in March 2006. “Another top performer. Artemis, is well known today but back in March 2000 when T.Bailey began to invest in it, it was not,” he says.
Breaks thinks there is nothing to dislike about the fund. “The competition is the many fund of funds and manager of managers funds that are already available but the key differential here is T.Bailey’s track record of identifying talent in the less trodden fund manager grass,” he says.
Summing up Breaks says: “I like the fund. T Bailey has a good track record in this arena and for the more adventurous investor,I think there is a lot of appeal.
BROKER RATINGS
Suitability to market: Good
Investment strategy: Good
Commission: Good
Adviser remuneration: Good
Overall 8/10
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