Aberdeen Asset Management – Global Champions Fund
Aim: Growth by exploiting themes of globalisation, innovation and communication.
Minimum investment: £500 lump sum, additional £100 (unit trusts), £500 (Isas), £50 a month.
Investment split: US 75 per cent, other 25 per cent.
Charges: Initial 4.25 per cent, annual 1.5 per cent.
Special offer: Initial charge discounted by 0.5 per cent
Offer period: Until November 30, 2000.
Isa link: Yes.
Pep transfers: Yes.
Commission: Initial 3 per cent, 0.5 per cent renewal on Isas.
Tel: 0800 0151646.
Chris Boylan – Principal, Chris Boylan Independent Financial Advisers
Tim Storer – Director, Luker Rowe & Co
Michael Posner – Principal, Charter Devon Law & Co
David Mullin – IFA, Assured Investment Services
Jeremy Parrott – Managing director, Birnbeck Finance
Broker Ratings (ave. marks out of 10):-
Suitability to market: 8.6
Investment strategy: 8.6
Past performance: 7.2
Company's reputation: 8.0
Product literature: 7.4
Aberdeen Asset Management has introduced the global champions fund to exploit the themes of globalisation, innovation and communication.
Looking at how the fund fits into the market, Storer says: “Obviously, when equity investment is making people money, there is always room for new funds. But even if equities suffer a global wobble, there should still be ample opportunity for a fund like this.
“It is taking advantage of the fact that the new world economy has little or no regard for geographical or sector boundaries, thus pitching its tent, so to speak, on the wide open spaces of the new economy landscape.”
Posner says: “This is a global opportunities unit trust that can be held in an Isa and seeks to benefit from changes that are forecast to occur in the world economy.”
Parrott says: “I like the idea of merging the three main investment themes. Potentially, the fund invests in some of the most lucrative investment areas of recent times as well as the foreseeable future. I believe it offers excellent growth prospects from these markets as well as the changing world economies.”
Boylan feels the product could have a wide appeal in today's market.
Identifying the types of client for whom the fund might be suitable, Posner says: “I would consider this fund is suitable for the majority of clients who have a desire to enjoy capital appreciation over the medium to longer term. The only real consideration is the level of exposure given by the client's risk profile.”
Boylan says: “It is suitable for the client who is seeking a lively growth fund for the med ium to longer term.”
Parrott takes a slightly different view. He says: “With the probability of some fluctuations in value, the fund definitely applies to longer-term investors. The potential volatility rules out the risk-averse client but will attract those who believe in changing world markets.
“I suspect it will appeal to younger investors who are better placed to take a longer-term view. I also believe it will appeal as a more speculative investment for self-invested personal pension or small self-administered scheme clients.”
Examining the types of marketing opportunities that the fund offers, Posner says: “As the fund is being launched by one of the most successful specialist sector investment groups, it will always be worthwhile bringing a new fund like this to the attention of clients.”
Boylan says: “Although a touch specialist for a core holding, the global champions fund could balance the UK and Europe concentration of an existing portfolio.”
Parrott says: “There are good opportunities among younger clients. I also see opportunities with those investors who have considered technology funds but who want a wider spread of investments. I would also include it with Sipp and SSAS investments.”
Storer says: “This is an ideal opportunity for clients to cash in gains elsewhere or diversify from existing global growth and technology holdings and then reinvest in a fund with vast potential.”
Looking at the fund's main useful features and strong points, Mullin says: “The investment concept is not restricted and offers a strong reason for any client to invest in a concept which makes sense. It is a simple, straightforward approach to what is producing the world's leading companies.”
Posner says: “The product has a good pedigree, offers an opportunity to share in a developing market and has Isa capability and restricted access for Pep transfers. It also has reasonable charges and a focused investment strategy, which uses an element of Aberdeen's most successful fund management – technology.”
Parrott says: “The fund is widely accessible via a number of investment products. It looks to be well spread among various industries, albeit with in three broad themes. Assuming the managers get the fund composition right, there are good growth prospects.”Turning to the drawbacks of the fund, Boylan says: “There appears to be a heavy US bias, both in the statement of strategy and in the backgrounds of the fund management team. There is no doubt many global corporations are based in the US but some fund managers are now taking a neutral or overweight attitude to the US.”
Posner says: “As it is a new fund, we are reliant on Aberdeen's ability to identify world trends in its chosen areas. The only track record is its ability to perform well in the technology sector and we are therefore being asked to trust Aberdeen's ability to repeat the formula.”
Parrott says: “There is a US bias and another drawback is the inclusion of smaller, more volatile holdings. However, the US is where most of the leading players are situated and identifying the next leader is the name of the game.”
Mullin cannot identify any disadvantages to the product.
Turning to the investment strategy, Storer says: “The them atic approach is a proven strategy in the hands of this team of fund managers and the idea of building a fund around a core of large-cap stocks spread across the over lapping areas of globalisation, innovation and communication should appeal to all but the most myopic client.”
Posner says: “There is a natural progression from Aberdeen's success in the technology field. The focus on demographic and social changes, which reflects the way the world is changing, does lend strength to the fund, providing Aberdeen identifies the areas of change early enough.”
Mullin says: “The investment strategy is very good. It is a different style which should be well received by the market in general.”
Parrott says: “The strategy is speculative but the three main areas are all identified as key growth areas. I have some reservations about the US bias and inclusion of smaller companies. The managers' research will have to be particularly good to counter these points.”
The panel are complimentary about Aberdeen's reputation. Storer says: “It has an excellent reputation which I think has been well earned over the last few years. Its push into the IFA market has worked well, not just because it has delivered the perform ance but also because it has delivered the sales aids, literature and sales support.”
Boylan believes Aberdeen is becoming known for forward-looking fund management.
Mullin says: “Aberdeen's reputation is more than acc eptable and if its recent performance figures continue, it should only get better.”
Commenting on the product literature, Boylan says: “The literature puts itself across well but the subject of globalisation is merely touched upon without a clear explanation of how the fund intends to exploit it.”
Summing up, Storer says: “I am sure this fund will make a real impact on ordinary investors and offer IFAs a great opportunity to persuade the more cautious investor to let go of the railings and jump into the 21st Century.”
Aberdeen Asset Management – Global Champions Fund