Deutsche Asset Management, which will be known as DWS Investments from this month, has created the DWS UK opportunities fund. The fund is more aggressive than the Oeics in the company's existing range. It aims for capital growth by investing in a concentrated portfolio of 25 UK stocks.
The fund will be managed by Phil Doel, who joined the company in January. He is a member of Deutsche's UK equities team and has seven years experience of managing retail and institutional funds.
When selecting stocks for the portfolio, Doel will have access to a global equity research portal which provides information on around 114,000 stocks. The UK opportunities fund will focus on stocks which have strong cash flow, good quality management and appear undervalued.
Unlike some aggressively managed funds, there will not be a high turnover of stocks within the portfolio. Instead, the fund will aim to pick long-term winners, with the fund manager having around 10 stocks to move in and out of the portfolio at his discretion.
Some UK stocks are undervalued at present, which represents good buying opportunities for stockpicking funds. As this fund has a very small portfolio, any recovery in share prices will have a stronger impact than on funds with bigger portfolios.
However, with many investors still wary of committing their money to the equity market, some may not have the appetite for this type of fund at the moment.
According to Standard & Poor's, the Deutsche UK growth fund is ranked 36th out of 254 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to August 16, 2002.