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Forsyth keeps eye on UK funds

FORSYTH PARTNERS

FORSYTH UNITED KINGDOM FUND

Type:
Offshore Oeic fund of funds

Aim:
Growth by investing in open-ended UK equity funds

Minimum investment:
Lump sum £5,000

Investment split:
100% in open-ended UK equity funds

Place of registration:
Dublin

Charges:
Initial 1%,
annual 2%

Commission:
Subject to negotiation

Tel: 020 8649 9440

The Forsyth United Kingdom fund is an offshore fund of funds that invests in funds such as Rathbone income, SocGen UK special opportunities and Barclays Invest Luxembourg Sicav UK equity.

Chase de Vere Financial Solutions research manager Justine Fearns thinks the majority of interest in this fund may be from advisers who want control over asset allocation and to actively manage their clients&#39 portfolios.

Looking at the United Kingdom fund in detail, Fearns says: “As a UK only portfolio it omits geographical diversification but offers considerable sector diversification within the UK. This removes the responsibility of fund selection from the adviser, which from a regulatory point of view is deemed positive by some advisory firms.”

Fearns notes the portfolio is very small because it is a new fund and thinks this may put it at a disadvantage, as many IFAs require a specific fund size before investing. She says: “It is currently invested between nine funds and offers a diverse investment spread covering all market caps and style biases. We can&#39t comment on performance yet but we may be able to glean an insight from the underlying funds.

Fearns regards the initial charge as competitive but points out this may increase if an adviser negotiates commission on a discretionary basis. She feels the annual management charge could be seen as too high.

On the drawbacks of the product Fearns says: “Demand for offshore funds of funds is probably low and there are already good quality UK-domiciled products available. But it&#39s always good to have the choice.”

She adds that some kind of track record that relates solely to the UK is lacking. She says: “I&#39m sure I&#39m not alone in saying I would want to see some performance figures on this portfolio before we would consider investing, regardless of whether or not its starting with a clean sheet, a good process and a strong UK economy.”

Fearns feels Credit Suisse will be the main competitor for this portfolio. And concludes: “Forsyth will need to position itself carefully, if not cleverly, in order to compete.”

BROKER RATINGS:

Suitability to market: Average
Investment strategy: Good
Charges: Average
Overall 6/10

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