Dollar Fixed Income Management Fund
Type: Offshore Oeic
Aim: Growth and income by investing in international fixed income securities and money market instruments
Minimum investment: Lump sum Euros 40,000
Place of registration: Isle of Man
Investment split: Inflation-linked bonds 58%, other bonds 10%, cash 32%
Isa link: No
Charges: Initial 5%, annual 1.75%
Commission: Subject to negotiation
Tel: 01534 512280
John Hill – IFA, Positive Solutions
Godfrey Bloom – Investment director, TBO Corporate Benefit Consultants
David Divers – Principal, Sandringham Investments
Mike Gilbey – Managing director, Atlantean Financial Management
Suitability to the market: 7.3
Investment strategy: 7.3
Companys reputation: 7.5
Product literature: 8.8
Ashburton has introduced the dollar fixed income management fund, an offshore Oeic that invests in fixed-income securities and money market instruments.
Hill feels that it fits into the market well alongside other long term income plans available. Bloom says: "Quite well – there is always room for a well managed dollar income fund."
Divers feels that it falls under the category of private portfolio management for US dollar oriented clients.
Gilbey says: "The product has limited appeal to UK based investors in general, but can form the foundation for both expatriate and very large portfolios requiring exposure to North American low risk instruments. The product may also be suitable for the business investor, and for specialist use such as trusts with beneficiaries requiring dollar incomes."
Turning to the type of client that the fund may be suitable for, Bloom feels it will suit international clients who want either income or low risk assets in the primary world reserve currency.
Divers says it will appeal to: "US expatriates, cautious investors or large scale private portfolio clients." Gilbey adds to the list the very young investor who is the dependant of a trust. He feels that the minimum investment would prove restrictive for the small portfolio.
Hill says it will appeal to clients who are: "Coming into retirement, looking for steady income. The problem is that at the mention of dollars, people think high risk."
Moving on to the sort of marketing opportunities the product will provide, Bloom says: "A good opportunity for clients sitting on cash who are equity averse." Hill thinks that for those with stable income requirements, it is a very good option.
Gilbey says: "This product fulfils the need for income in dollar terms, and provides a secure or lower risk base to a large portfolio." Divers feels that it will present few opportunities for the IFA in this country as it is too specific.
The main useful features and strong points of the product that the panel identify include sound management, a good track record, very defensive asset allocation, the remit for cash when bond markets look less attractive and the fact that the income from the product is low risk.
Casting an eye over the products drawbacks, Hill identifies a slightly lower rate of income. Gilbey says: "The main disadvantage is that it is a specialist fund. Its offshore status, income bias and dollar denomination mean that it is unlikely to appeal to mainstream UK resident investors."
Divers says that there is little sign of a dollar recovery and feels that the product suffers from a potential currency risk.