Deutsche Bank is offering the UK's first mainstream retail hedge fund product which targets IFAs as well as direct investors.
Xavex HedgeFirst is a fund of hedge funds and the first product of its kind to be fully Isable. It will also be the first hedge fund product to be accessible to lower-net-worth clients as it has a minimum investment limit of £7,000. Minimum investments are generally more than £250,000 for hedge fund products.
The offer period for the fund, which will be listed on the London Stock Exchange, will run until March 22, with trading set to start on April 2. It is expected to have a lifetime of around five years.
The fund will hold between 15 and 50 hedge funds and will be managed by Deutsche Asset Management's US-based hedge fund team. Initial charge is 2 per cent and annual up to 1.6 per cent. Initial commission is up to 3 per cent, with up to 0.5 per cent trail.
Deutsche Bank says the fund falls in the medium-risk bracket and is best suited to fairly experienced stockmarket investors who are looking for a means of diversification.
Director of global equities Martin Fothergill says: “Over the last decade, hedge funds as a group have combined equity-like returns and bond-like risk, as one can see if you compare the HFRI index with other world indices. In addition, they have exhibited a relatively limited correlation to traditional asset classes such as equities and bonds.”