Aim: Growth by investing globally in equities
Minimum investment: Lump sum £1,000, monthly £50
Investment split: 70% developed market equities, 20% emerging market
equities, 10% UK equities
Isa link: Yes
Pep transfers: Yes
Charges: A shares – initial 5%, annual 1%, N shares annual 0.5%
Commission: A shares – initial up to 5%, renewal 0.5%, N shares – none
Tel: 0800 995511
FIL FundsNetwork PortfolioManager: aggressive is a fund of funds with different share classes for fee-based and commission-based advice.
Charter Devon Law principal Michael Posner observes that FundsNetwork has probably been the most successful of the fund supermarkets. “It has recently evolved into a fund platform with the fairly recent introduction of bond and Sipp wrappers to its existing Pep, Isa and collectives capability,” he says.
Posner notes that the most recent additions to FundsNetwork are five multi-manager funds, rated from cautious to aggressive risk profiles, with the latter being 100 per cent invested in equities. “This, in turn, is broken down into 10 per cent UK equities, 70 per cent developed market equities and 20 per cent emerging markets. The platform offers a risk profiling tool, which leads on to assist in fund choice, and the fund managers have access to over 1,100 collectives currently offered through the platform, in addition to institutional funds, to which they will also have access,” says Posner.
“The feature that is highlighted, in view of the Retail Distribution Review, is the flexibility of charging structures offered. The fund has the option of a nil initial charge and a 0.5 per cent annual management charge, for those IFAs who are 100 per cent fee based, or a range of initial charges of 0-5 per cent. Renewal is up to 0.5 per cent, which is reflected in the annual management charge,” says Posner.
He says this is fully explained in the client-facing product literature, and encompasses the likely introduction of customer agreed remuneration as a result of the RDR. “As this is a “manager of managers” fund, there are additional annual management charges that are payable to the underlying funds, which are shown as a maximum of 1.25 per cent a year on launch of this fund,” says Posner.
Turning to the potential drawbacks of the fund Posner says: “There is little to dislike about the product, bearing in mind that the nature of the fund makes it suitable for achieving long-term capital growth and Fidelity has a track record in managing this type of fund. The additional costs – albeit estimated at launch – are somewhat high, bearing in mind the level of rebate that would be available to Fidelity as an institutional investor. However, that is the inherent cost of paying a third party to manage the portfolio on behalf of investors,” he says.
Scanning the market for likely competitors Posner suggests fettered funds from Invesco Perpetual, M&G, and Prudential, alongside unfettered funds from F&C, Investec, Jupiter, and New Star.
Summing up Posner says: “If customer agreed remuneration does become the norm, then all these houses will require offering the same options, and it is a moot point as to whether one should choose an established or a new fund, as there are arguments in favour of both.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Good