Christows has converted three offshore funds of investment trusts to
onshore funds of funds that invest mainly in exchange traded funds
David Franklin managed the three offshore funds and will now run
the onshore funds, which are aimed at the IFA market. As well as
ETFs, Franklin will also hold investment funds and quoted securities.
He can also hold cash to reduce risk when markets are volatile.
The managed growth fund is designed to outperform the FTSE All
Share Index with an emphasis on UK equities and bonds, although
some investment will be made in other markets. The overseas
growth fund is benchmarked against the FTSE World Index (ex UK),
so it differs from the managed growth funds by not investing in the
UK. The worldwide growth fund is different from the other two funds in
that it invests globally across all regions without excluding or
Figures from investment bank Morgan Stanley show the ETF sector
grew rapidly during 2003 as markets recovered, with assets under
management rising globally by 49 per cent to $211bn. Assets under
management in Europe, which still lags behind the US market, was
up by 83 per cent to $19.5bn.
Christows' decision to focus mainly on ETFs may be a wise move if
growth in the market spreads to the UK at the same rate as the US
and other parts of Europe. However, Barclays Global Investors closed
its sector-based ETFs through a lack of interest and demand for
ETFs in the UK is coming mainly from institutional investors, while
retail investors prefer conventional funds.
The Christows funds may appeal only to more sophisticated
investors who understand how ETFs may enhance the diversification
achieved through funds of funds and add a degree of versatility to the
portfolio because they can be traded like shares.