Mullin says: “Not a well known product provider. Offshore does not appeal to investors generally. It may appear overly complicated at first glance, and there is no history of performance and investment.”
On the subject of the flexibility offered by the fund, Hosking says: “There is some flexibility with the broad range of asset allocation and access to managers not normally available to investors with the minimum £10,000 required.”
Mullin points out that the flexiblity will depend on the investors need for investment returns.
Holdaway is less enthusiastic: “Not very flexible in terms of buying, selling or switching. No income available, and the minimum investment is £10,000.”
Considering Collins Stewart's reputation, Mullin says: “Not very well known to me, but their reputation will only be viewed by any client on the basis of the product being offered, not in the name.”
Holdaway says that he had not heard of them before, and hence cannot comment.
Hosking says: “Stronger reputation as an institutional operator than a private client management service.”
Moving on to the past performance record of Collins Stewart, Holdaway says: “All their funds are only just over a year old, so it is difficult to comment. Certainly, compared to the benchmarks over one year, the performance looks impressive on most funds.”
Hosking also feels that it is difficult to comment as the funds have not been running for long enough. Mullin says that he has never used the company previously.
Looking at which products will provide the main competition, Hosking mentions Orbis and Wimbledon Fund. Holdaway lists Henderson and Global Asset Management.
Mullin says: “As this type of investment is still in its infancy compared to the overall market, the area which the majority of investors have initially looked at is the with-profits or managed bond.”
The panel has a difference of opinion on the subject of whether the charges are fair and reasonable. Hosking says: “It appears expensive, but there is an opportunity to take reduced commission and offer better terms.”
Mullin says: “Annual management charge of 1.5 per cent represents a fair charge based on the actual fund management proposed. The initial charge of up to 5 per cent needs to be made clear on how the amount will be calculated, as it is a combination of the equity and bond fund, but in general what you would find acceptable.”
Holdaway says: “Yes, for the amount of research required. Compared to other non-hedge products they are high, especially performance fee of 10 per cent.”
When asked whether the commission is fair and reasonable, Mullin simply says yes. Holdaway says: “Yes, although it is not clear whether it can be sacrificed to reduce the initial charge. I would rather have a lower initial and 0.5 per cent fund based immediately.” Hosking says the commission is generous.
Opinions vary on the subject of the product literature. Holdaway says: “Not sales orientated at all – very factual. Did not give much information to clients, prospectus very dull.”
Mullin feels that the literature is well presented and illustrates the fund's objectives.
Hosking says: “Basic and with a bit too much writing on each page, it gives the feeling of being cramped, and could be more spread out to make it more appealing.”
Summing up, Hosking says: “A simple strategy for growth, but inevitably a complicated product likely to appeal only to clients with serious investment funds.”
Holdaway says: “This is not what could be called a mainstream product.”