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First State invests in UK

First State Investments is focusing on the UK with the introduction of the British mid-cap fund.

Created as an open-ended investment company (Oeic) the fund is aimed at medium-risk investors who are looking to broaden their portfolios.

The Oeic will invest in between 60 and 80 companies, with at least 90 per cent of these being medium-sized UK companies which cover a wide range of sectors. The fund will benchmark the FTSE mid-250 index, excluding investment trusts. The remaining 10 per cent will be companies outside the index, possibly including ones listed on the alternative investment market.

The companies will be chosen on a bottom-up basis with First State concentrating on firms that have good long-term potential. Some of the companies included will be Scottish Media, Thistle Hotels and transport logistics firm Christian Salveson. The Oeic will not invest in any companies also listed in the FTSE 100 index.

British mid-cap will be managed by Derek Lygo, who joined First State in October 2001. Before this he managed a spread of UK unit trusts at Dresdner RCM.

The fund will join the other 303 funds in the Standard & Poor’s UK all companies sector and does not stand out as offering anything innovative, although it could appeal to clients who already invest in the FTSE 100 and who want to spread the risk beyond this area.

According to Standard & Poor’s of the 18 funds run by First State, two are first quartile, three are second quartile, six are second quartile and six are fourth quartile, based on £1,000 invested on a bid-to-bid basis with gross income reinvested over one year to November 26, 2001.

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