Full marks for Invest & Give
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Invest & Give Fund
Type: Oeic fund of funds
Aim: Growth by investing in a multi-asset portfolio of investment funds
Minimum investment: Lump sum £1,000, monthly £100
Investment split: 32% UK, 15% UK bonds, 10% Asia Pacific ex Japan, 9% Europe, 8% US, 5% emerging markets, 4% Japan, 12% other assets, 5% cash
Charges: Initial 2%, annual 0.95% plus 0.6% donation to The Prince’s Trust youth charity
Commission: Initial 1%, renewal 0.25%
Contact: www.investandgive.co.uk
The Invest & Give Fund is a multi-manager multi asset fund in the IMA Balanced Managed sector. It donates 0.6 per cent of assets under management to The Prince’s Trust, which works with people aged 14 to 30 who have struggled at school, have been in care, are long-term unemployed or have been in trouble with the law.
Looking at the fund’s suitability to the market, Arch Financial Planning managing director Arthur Childs thinks that it offers an easy and painless way for investors to give to charity.
He says: “This fund represents a brand new and interesting idea and I am sure many IFAs will discuss this with their clients. It can do no harm for the image of the fund management industry which is suffering both as a result of producing huge losses for investors, and the general shock still being caused by the unwinding of the credit crisis.”
He notes that 12 of the best known brands from the UK fund management industry support the fund, but the fund’s investments are not restricted in to the funds of these companies.
The portfolio manager is John Husselbee, whom Childs regards as one of the most experienced multi managers in the UK. Husselbee ran multi-manager funds for Rothschilds and Henderson before setting up North Investment Partners through a management buy-out from Neptune.
“Apart from the restrictions of the chosen IMA sector, the asset allocation will be fluid in terms of investment type, geographical or economic sector, but the fund is expected to maintain a core holding in the UK,” says Childs.
He adds that the charitable donations made through the fund will benefit from Gift Aid. “This equates to an additional 28p for every £1 that The Prince's Trust receives from investors. Once the fund is £10m in size, The Prince's Trust will receive £60,000 a year which, with Gift Aid, will increase to £76,800. “ He thinks that Gift Aid will provide a further talking point for advisers with clients who are higher-rate taxpayers.
Assessing the charges, Childs says: “The total expense ratio excluding the donation to charity is an attractive 1.65 per cent, so that the estimated annual cost of the investment is 2.25 per cent is in line with the average annual TER for multi manager funds. Investors can give via this fund without noticing the cost to themselves.”
He adds that given the low charges, it is to be expected that adviser commission is just 1 per cent initial and 0.25 per cent renewal. “ This will have no affect on the growing population of advisers using wraps and fee based advisers generally and is a good level given the low level of the total charges involved,” he says.
Discussing the drawbacks of the fund, Childs says he has two main concerns but the fund is such a welcome innovation that do not dampen his enthusiasm for it. “My first concern is that this will be seen as something of a gimmick. Even when the fund has grown to, say, £130m it will provide just 2 per cent of the stated annual income requirement of The Prince’s Trust which is around £50mn. I am not sure that someone investing £50,000 in the fund would not rather simply give £300 a year to their own choice of charity and be unrestricted as to their choice of investment fund. “
He adds that the 12 management groups that are supporting the fund have agreed to discount their normal retail management fees if their funds are included, but multi-managers negotiate fees on the underlying funds anyway. He feels investors and IFAs are giving more than these investment groups.
Assessing the competition, Childs says: “There is no competition for this fund and it will be interesting to see how quickly other fund managers follow suit. This would surely be an excellent model to follow for an ethical fund as the investors in such funds have already chosen to take a wider view than that of their own investment return.
Summing up Childs says: “John Husselbee would seem to be an excellent choice as fund manager but I hope that as the number of mandates that North Investment Partners is involved in continues to grow, that he would hand over some of the general running of the company to others so that he can concentrate solely on investors’ interests.”
BROKER RATINGS
Suitability to market: Good
Investment strategy: Good
Charges: Good
Adviser remuneration: Good
Overall 10/10
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