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Chase Fleming gets dynamic about Europe

Jordan says: “This product has higher than average risk, the charges are also higher than average and also this fund has no track record.”

Flowers says: “The main disadvantage to this fund is cost. It is an expensive investment with a full bid/offer spread and an exit charge, plus a switch charge. If you invested for a year and make one fund switch you would need to have seen a return of around 10 per cent over the year to break even. Also the investment has no regular savings option and finally compensation under the investors compensation scheme is not available.”

Looking at the flexibility offered by the product, Chapman says: “The flexibility offered is reasonable, although I am not in favour of redemption charges.”

Flowers says: “I really do not think much of the flexibility that the product offers. There are plenty of switching options, but at a cost. The minimum investment levels are quite high as well for this type of fund.”

Moving on to Chase Fleming’s reputation in the market, the panel is complimentary. Jordan says: “Its reputation is good in certain areas and it has a consistent fund management team. It also has a good product label with a strong quality brand.”

Flowers says: “Chase Fleming has a very good reputation, although it is swallowing a Fleming / Save & Prosper meal which has caused some indigestion over the last few years.” Chapman adds: “Chase Fleming is thought of quite highly and the Fleming funds have always had a specialist approach to their investment style.

However looking at Chase Fleming’s past performance record, the panel is less positive. Flowers says: “It is difficult to assess the company’s past performance record as their have been several mergers and combinations of fund management teams.”

Chapman says: “Depending on the current economic climate, Chase Fleming’s funds have in the past performed either extremely well or extremely poorly.”

Jordan disagrees. He says: “Chase Fleming’s past performance is very good in most key sectors.”

Identifying the products that provide the main competition, Chapman points to some of the more specialist European funds, while Jordan says: “Competition will come from the Schroder EuroTech fund, the Invesco European smaller companies fund, the Henderson European smaller companies fund and the M&G European smaller companies fund.”

Flowers says: “I think that the main competition will come from specialist European funds, especially from those without benchmarks and sector diversification constraints.”

Moving on to the issue of if the charges are fair and reasonable, Flowers says: “Not really. They are at the top end of normal investment charges, and to then add a 0.5 per cent redemption penalty makes it very unappealing.”

Jordan says: “The annual management charge is a little on the high side. Only future performance will determine if it is a reasonable charge or not.”

Chapman adds: “The charges are maybe slightly on the high side. However offshore funds are usually more expensive than onshore funds.”

The panel regard the commission offered by the fund as being fair and reasonable.

Looking at the product literature, the panel is not that impressed. Jordan says: “The literature is a little glossy with not too much substance at all,” while Chapman says: “The product literature is not very exciting at all for a fund which is supposed to offer plenty of excitement.”

Flowers says: “The pamphlet offers more of the new genre of small words, lots of space around the words, and some meaningless pictures. However it does look high quality.”

Summing up, Jordan says: “This is the kind of fund to use where it is worthwhile to dip your toe into the water.”


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