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CSAM uncovers X factor

Credit Suisse Asset Management

Credit Suisse Multi-Manager Incubator Fund

Type: Unit trust fund of funds

Aim: Growth by investing in a portfolio of investment funds including small funds, new funds and unregulated funds

Minimum investment: Lump sum 1,000

Investment split: 100% in a portfolio of investment funds

Isa link: No

Pep transfers: No

Charges: Initial 4%, annual 1.5%

Special offer: Initial charge reduced to 3%

Offer period: Until September 30, 2005

Commission: Initial 3%, renewal 0.5%

Tel: 020 7426 2929

The Credit Suisse Multi-Manager Incubator Fund is a unit trust which has non-Ucits status. It can invest in a range of underlying funds, including new funds, small funds and unregulated funds.

Michael Philips proprietor Michael Both believes Credit Suisse Asset Management can credibly claim to be one of the leading multi-managers. “A competent manager running your diversified portfolio of independent star and rising star funds is inherently appealing. It touches all the right bases and the FSA should smile on us for ticking all the right boxes,” he says.

However, Both finds the product information at launch lacking in detail and this causes him great concern. He says: “Sadly the fund information is long on platitudes and short on useful detail. I have read the launch brochure carefully. I really have. And I still dont know what on earth CSAM is actually going to do with the money it raises. As a responsible IFA that should worry you.”

Both notes that the fund has a 4 per cent initial charge and 1.5 per cent annual management charge, but no mention is made of what discounts are to be negotiated with the underlying funds in which the multi manager is investing.

According to Both, this could be quite an expensive route. He explains: “There is no mention of discounts being negotiated, kept to boost CSAMs profits or passed on to investors. Will Incubator invest in other CSAM funds or is there a policy of excluding them? The brochure doesnt even hint.”

Warming to his theme, Both wonders how IFAs are supposed to integrate this fund into the rest of a clients portfolio without doubling up individual funds if CSAM isnt giving them a clue what it is holding in the fund at this stage.

He says: “If what we are seeking for our clients is a competent multi-manager fund, I prefer ones with a track record so CSAMs own Constellation, Invesco Perpetual World Income or Jupiter Merlin Growth Portfolio would all be worth considering.”

Both complains the literature is rather too general to enable anyone to pinpoint precisely where the money is going to be invested. “Two of the themes CSAM profess to be targeting are “unrecognised talent” something of an oxymoron and “accelerated apprenticeships” which is more vacuous hyperbole. Obviously the idea of being in funds which will “become the heroes of tomorrow” sounds great. But so did CSAMs late, unlamented Post Venture Capital fund and its current Target Return fund, whose aim is “achieving a positive investment return” neither of which would be considered great successes by their investors. The third strand, “old hand new start” at least sounds more concrete,” says Both.

Summing up Both says: “CSAM should be able to identify and invest in the new funds of competent, established managers since that data should be readily available to CSAM via services such as Citywire. Whether that is a wise investment strategy is another question. Novelty may be preferred by children receiving gifts, but when it comes to the serious job of selecting investment funds, take a good hard look at the managers record and be very careful you dont get bitten.”

BROKER RATINGS
Suitability to market: Poor
Investment strategy: Average
Charges: Poor
Commission: Average

Overall 3/10

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