Stockbroker Durlacher has entered the retail market with the introduction of two Oeics, one of which is the CF Durlacher growth plus fund.
This Oeic aims to achieve capital growth over the long term by investing in a portfolio of around 50 stocks, benchmarked against the FTSE All-Share index. Around 10 per cent of the fund may be invested in other countries.
Simon Steele, the fund manager, will invest in what he perceives to be exceptional stocks, regardless of market capitalisation or sector. Steele joined Durlacher late last year from Singer and Friedlander, where he spent two years running a small-cap fund.
The stocks the new fund will invest in will share an ability to sustain above average earnings growth over the next three to five years. Examples of these companies include market research group Taylor Nelson Sofres and pub chain JD Wetherspoon.
When selecting stocks, Steele will look for companies that dominate their area of the market and where growth is influenced by factors such as changes in legislation or the move towards outsourcing. Having good growth potential is not enough to justify picking a stock. Companies must also be backed by strong management and cash flow is very important.
Stockmarket investors are now unlikely to get the high returns that were possible in the 1990s and Durlacher's research-driven approach will be important in generating decent returns in current conditions. But rival companies such as Royal & SunAlliance have also adopted this model, and some investors may not invest with a new fund management group until a track record is established.