Aim: Income and growth by investing globally in equities
Minimum investment: Lump sum £5,000
Investment split: 100% in global equities
Isa link: Yes
Charges: Initial up to 5%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 00353 87 2074840
The Elite Bloxham global equity income fund is available on Transact and Vantage, with availability through Skandia, Standard Life, FundsNetwork and Cofunds in the pipeline.
Michael Philips proprietor Michael Both says: “This sub-fund of the Fitzwilliam Oeic is aiming for quite a demanding level of income – an initial yield 4.4 per cent. It hopes to increase this by 8-10 per cent a year while providing medium to long term capital growth.”
Both points out that this widely diversified fund will invest mainly in big companies, anywhere but South America, with a low debt equity ratio, high cash cover, high dividend yield and a low price/earnings ratio. He adds that there may be currency hedging at the manager’s discretion.
“Overall, Dublin based Bloxham runs around £1bn, with £750m in the offshore global high yield fund,” he says.
Looking at the potential drawbacks Both says: “Global income funds are beginning to look like a mini-bandwagon, presumably because no one is predicting much capital growth in the near term.
“While I can find nothing specifically wrong with this fund, at the same time I am struggling to find anything particularly distinguishing about it. This means that in a market which is already very crowded with incumbents jostling for attention, Bloxham hasn’t given the adviser any very compelling reasons to recommend it.”
He adds that the danger of targeting such a high yield is that it can encourage the purchase of shares in companies on their way out, although the manager should be alert to this.
“As someone who likes to statistically investigate track records for correlations with stock indices, indicating either closet tracking or independence of investment style,
I find the absence of a listing on Financial Express’s weekly data service, even for the Dublin based funds, more than a little frustrating. This leads me to question just how committed Bloxham is to the domestic UK adviser market in the long term.”
In Both’s view, HL Multi-Manager cautious and Schroder global equity income could provide competition. These have a similar brief, but Both says their recent performance is not especially comforting.
Summing up Both says: “One might question whether a 10 per cent weighting in Ireland is an appropriate reflection of the country’s relative importance to the global economy or simply indicates the manager’s local focus.
“The lack of disclosure of the fund’s top 10 holdings on a timely basis, or the current size of this particular sub-fund, are omissions which fail to inspire confidence.”
Suitability to market: Average
Investment strategy: Average