Oeic fund of funds
Growth by investing in DWS equity and bond funds
Lump sum £1,000,
50% equity funds, 50% bond funds
Initial 4.25%, Isa 3.25%, Pep transfers 3%,
Tel: 0800 917 0005
The DWS managed distribution fund is a fettered Oeic fund of funds that invests in a range of DWS equity and bond funds.
ABG International (Isle of Man) investment consultant Julian Melling thinks that for clients requiring an income, the distribution fund as the core of a portfolio makes sense. He says: “This product offers a diversified portfolio of assets that can provide income and capital growth. The fund represents a managed portfolio of DWS funds that can be used as the core asset in an overall investment strategy, rather than selecting a variety of funds from different managers that would have to be re-balanced on regular basis.”
Melling feels the fund provides a simple solution for clients requiring additional income with long-term capital growth. He says: “The literature is simple but informative. The management of the investment risk is explained well in the back to basics section. Consistent performance is not just reliant upon the individual managers, but on the research machine the manager relies on for data.:
Melling points out that DWS is a large organisation with considerable research capabilities that are continually monitored. He adds: “The mention of cash flow analysis in the literature also provides clients with an answer to the question 'what criteria do they use to value a stock?' The team approach used in stock selection is still quite novel and makes sense for this type of investment. Why have one generalist when you can have several specialists?”
However, Melling notes that the fund does have some flaws. He says: “DWS isn't the best at everything; so clients may sacrifice performance for a one stop shop solution. Also, the lack of a track record for the overall fund may present problems, and the fact that distribution funds have usually been the domain of life fund managers may go against DWS.”
This point leads Melling to ponder which funds are likely to compete with the DWS fund. He says: “There are several distribution funds available. New Star is probably the main competition with the managed distribution fund, though as the DWS literature states 'New stars fade.” The DWS fund is also available via the Skandia Multi Distribution Bond along with Norwich Union, AXA, Prudential, and New Star.”
Summing up Melling says: “DWS has the research capability and a good track record that will provide investors with peace of mind. The team and blend of funds is slightly different to most distribution funds, it will be interesting to see if this approach yields better results.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average