Documents from Castlestone have exposed some unusual investments in its Intelligent Portfolio Asset Allocation fund of funds after its Aliquot Gold Bullion fund was shown to have high fees.
The fund is 191.71 per cent exposed to the funds it invests in. This is normally only possible if a fund invests in derivatives, not other funds.
The portfolio is not obliged to limit its exposure to 200 per cent, however. Castlestone explains the fund’s exposure is measured on a “value at risk” measure that has received regulatory approval.
Castlestone Management hit the news last month after it suspended three of its Dublin-domiciled funds following an order by the Central Bank of Ireland. The regulator believed the group may have contravened rules and reporting requirements over the governing of Ucits funds.