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Fulcrum balances the hedge fund equation for Skandia

Skandia Investment Management believes it can add value for investors by including sophisticated funds in its multi-manager portfolios such as the Fulcrum alternative beta plus fund.

The Fulcrum fund is held in Skandia’s recently launched alternative investment fund and in all six of its risk-targeted spectrum funds as part of a hedge fund replacement strategy.

It targets annual returns of between 8 and 12 per cent with low volatility and low correlation to traditional asset classes by investing in currency, equity, commodity and fixed-income markets.

Skandia says the Fulcrum fund is designed to outperform the hedge fund universe but it is a Ucits III fund, not a hedge fund.

The fund group says it wanted to invest in a fund that could produce similar returns to hedge funds without the associated problems such as high costs, lack of transparency, regulation and liquidity.

Some investors still associate hedge fund strategies with higher risk but Skandia says most strategies are designed to reduce risk and will benefit even moderately defensive portfolios. Fund manager Ryan Hughes says: “The Fulcrum fund is not unique but it fitted the bill of the type of asset we wanted. It gives hedge fund-like returns but is all the things hedge funds are not seen to be.

“A company like Skandia can add value through a fund like this. We look at the fund manager every day and understand where a fund fits into a portfolio.”


Bowe set to leave RDR role

Amanda Bowe will step down from her role as head of the retail distribution review after the RDR feedback statement is published in October.

Cost controls

Much has been written about the move that most advisers are taking towards servicing models and passive incomes and the challenges that manufacturers face regarding balance sheet erosion due to distribution cost. The generally accepted solution is a product with less initial and increased trail commission but this is in danger of creating problems as great as those it is designed to serve. I am talking about the cost of providing this solution to the consumer in this new model way of working.

Simon Fletcher

Auto-enrolment: pay attention or pay the price

By Simon Fletcher

As a chief executive officer of a business in the financial services sector, I have been dealing with the introduction of auto-enrolment for our clients for some time, but I can also speak from an employer’s point of view, having to go through the process ourselves.


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