The company has launched these funds because it has built up a wealth of experience in Europe, the US, Japan and technology, which it wants to make available to the wider market. It believes the funds will provide investors with more choice and the ability to diversify. Entering the market now, when valuations are low, allows the funds to participate fully when markets recover.
The North America fund will invest mainly in big and medium sized companies and will typically comprise both value and growth stocks, but may have a bias towards one or the other when appropriate.
The European fund will allow for exposure across the developed and emerging economies, but will focus on the more established regions at launch. This reflects the company’s view that in the current market, it is best to avoid excessive risk.
In its Japan fund, Cavendish will look for established high quality businesses with share prices that could rise when investor confidence and perceptions of the market improve. It will also focus on high growth companies that could be future market leaders.
Finally, the technology fund will invest mainly in big and medium sized companies on a global basis, but there will be some small cap exposure to provide a high growth element. There will be a bias towards the US as this is where many of the best technology companies are based.
Cavendish says technology has never recovered to the levels seen in the dot com boom and as the sector has also been hit by the recent financial crisis, there is room for growth in share prices when economic conditions improve.
All funds have flexible investment remits which allow the managers to invest in other markets and assets if deemed appropriate, but in reality they are unlikely to deviate from their main focus.
A Cavendish is a specialist in undervalued stocks and recovery situations, current market conditions may be perfect for these funds but some advisers may prefer to wait for a track record to build before investing.