Considering the drawbacks of the fund, Both says: “It has jumped on the style bandwagon, which means the fund's aims are so non-specific that it is impossible to establish what the benchmarks really are and thus how it is doing. Picking the Standard & Poor's 500 growth index, but saying that the objectives will change undermines the point of a benchmark in the first place.”
French says: “It will suffer during periods of value based rallies in the market.”
Flowers says: “The minimum investment of £5,000 is a drawback. It is a Sicav based in Luxemburg, therefore it is not available as an Isa, although the company is seeking to make the Fleming fund range Isa eligible from mid January.”
Assessing the investment strategy, French says: “It has a different approach to stock selection, but one that has proven successful for Chase Fleming. the fund manager is Henry Lortigue, who is part of Chase Fleming's highly respected investment management team based in Houston, Texas.”
Both thinks it does not have an investment strategy and Flowers thinks it is fairly standard. he says: “It is good to offer the choice of style – growth or value. However, the literature suggests that investors buy the FF-US strategic growth fund and the FF-US strategic value fund in order to diversify across styles. that is an excellent idea, but why not launch a US fund with both styles as part of a diversified strategy?”
Moving onto Chase Fleming's reputation, Both thinks it is excellent. Flowers thinks it is good although relatively unknown in the UK. He also points out Chase Fleming has yet to be tested.
French says: “Chase Fleming is a highly respected investment house with global resources and a disciplined investment philosophy which speaks for itself with funds under management in excess of £120 bn.”
Turning to Chase Fleming's past performance record, Flowers says: “It is irrelevant as the whole investment management structure is being changed with the mix of Standard & Poor's, Fleming and Chase.”
Both thinks the Fleming US micro cap is excellent and that the Fleming US technology and Chase smaller cap funds are good. However, he is not impressed by the Fleming select American smaller companies and feels the performance of the Fleming select American fund is 50-50. He thinks that on balance, Chase Fleming's performance in the US is above average.
French says: “Chase Fleming has a proven and successful track record, not only in respect of this fund, but across the board.”
Highlighting the fund's prospective competitors, Both says: “Every other American or technology fund in existence.”
Flowers suggests: “Either fund of funds identifying the same style-based diversification strategies or known funds already established with a growth or value philosophy.”
French thinks that not many companies will provide competition for Chase Fleming and adds that only Schroder springs to mind.
The panel is split as to whether the charges are fair and reasonable. French says: “Yes, the charges are in keeping with its contemporaries.” Flowers thinks the charges are expensive but Both thinks they are okay. He says: “Being part of an Oeic structure is an advantage. Given Chase Fleming's size, the client does not benefit from any economies of scale.”
Turning to whether the commission is fair and reasonable, the panel is not impressed with the lack of renewal commission. Both says: “It is okay at 3 per cent initial, but the option to take fund-based renewal commission would be good, especially within an Oeic structure.”
French agrees. He says: “It has the usual 3 per cent initial commission which is in keeping with the market. But it is disappointing that there is no fund-based renewal commission.”
Flowers says: “It is a standard 3 per cent initial with no renewal. It is not really flexible enough in the UK.”