Investec Guinness Flight's Asia New Economy Fund is aiming for growth by
investing in Asian companies involved in technology and the internet.
The panel agree that the investment strategy is good. Fairhall says: “It
is a good strategy that combines companies presently benefiting from the
new economy and those with future potential.”
Martin says: “It is good to see a better split between hardware and
software versus traditional internet activities so that the former has a
larger percentage allocation.”
Briggs believes the fund is “well-diversified across different sectors.”
Hawksworth points out the combination of technology stocks and the Asian
economy will result in high volatility. He says: “The companies the fund is
looking to invest in would appear to give the fund a good spread of sectors
although there is a fairly strong leaning to technology stocks, which,
coupled with the Asian economies, will heighten volatility.”
The panel hold similar views on the type of client the fund is most
suitable for. Martin identifies the “more sophisticated investor who does
not mind seeing his investment go on a financial merry-go-round.”
Fairhall says: “This is a long-term growth opportunity. Clients investing
in the fund will need to be able to ride periods of significant
Hawksworth refers to “experienced investors looking to increase the risk
profile of a reasonable-sized investment portfolio.”
Briggs asserts the fund is “not for the faint-hearted.”
Moving on to the fund's suitability to the market, Hawksworth says it is
“another opportunity for investors to experience the thrill of investing in
technology, the Far East and emerging markets in one fund.”
Briggs and Martin offer mixed responses. Briggs says: “It is good timing
to catch the economic cycle but bad timing to launch a technology-based
fund. Investors are very wary right now.”
Martin believes the technology fund market is getting crowded but feels
the fund is a welcome addition to thesector. Fairhall also feels it is a
useful addition to the market. He says the specific Asian focus provides a
new opportunity for investors.
When asked to commenton marketing opportunities, Hawksworth suggests they
are limited “to investors with an existing balanced portfolio” and “not for
Fairhall says: “Investors are always looking to invest in areas of
potential growth and outperformance.” He believes investors who have
enjoyed investment growth from the US economy are likely to sense the
potential of this fund.
Martin says: “With the recent US-China open trade agreement, this product
appears to be launched at an opportune time.”
Turning to useful features and strong points, the Asian focus scores
highly. Martin says: “The geographical diversity of the area should offer
ample opportunity for this type of investment.”
Briggs mentions “exposure to new economies throughthe Far East”.
Hawksworth suggests the fund is “an opportunity for the most adventurous
investor to invest in what will no doubt be an exciting area.”
Fairhall feels the company name, experienced fundmanagement team and sole
focus on Asia are the fund's main strengths.
But when asked to discuss the disadvantages of the fund, Fairhall believes
the Asian focus could become negative in certain conditions. “Being focused
on Asia can be a disadvantage if worldwide stock markets become volatile.
The new economy will have successes and failures. Picking the winners will
always be a difficult task,” he says.
The other panel mem-bers are united in their viewthat the fund's
denominationin dollars is a weakness. Martin highlights the exchange rate
costs of buyingdollars. Hawksworth says: “Being dollar-denominated, there
will be additional currency fluctuation rise as well as the investment
Briggs adds that the fund is not Isa-eligible as it is denominated in dollars.
The panel agree Investec Guinness Flight's reputation is good. Hawksworth
says: “Guinness Flight has a good reputation within the industry but is not
considered to bea household name with investors.”
That view is echoed by Martin, who feels the company is a “niche player
for more sophisticated investors”.
According to Briggs, Investec are a “highly respected investment
institution.” Fairhall adds that the good reputation is justified by some
The panel's response to the company's past performance is mixed. Briggs
says: “Many funds enjoy low ratings or mediocre performances. The Asian
smaller companies fund is a dog, hopefully the new economy fund will do
Hawksworth is less critical. He says: ” The majority of their funds have
performed reasonably well, although their equity global emerging markets
fund has not performed particularly well over the last two years. The
long-term performance is acceptable.”
Martin agrees the company has had some average performances but suggests
Asia and the Far East are its forte. Fairhall feels Investec's past
performance is “good”.
On the whole, the panel consider established technology funds will provide
the main competition.
Briggs goes for Far East sector leaders, including Henderson and Fleming.
He also believes the Investec Guinness Flight Hong Kong & China fund looks
Martin is more specific, singling out the Edinburgh Asian smaller
companies fund and the Henderson Pacific smaller companies fund as likely
competitors. Hawksworth mentions Fidelity's South-east Asia fund.
Fairhall says: “Few funds will currently compete directly with the fund
but Investec will continue to look to funds offering exposure to US
companies as well as Asian companies.”
The product literature is generally well received by the panel. Hawksworth
says: “The literature supplied was of good quality, well laid out and easy
Martin points out the literature is “well-observed and the information is
concise.” Briggs found it “striking and colourful” while Fairhall thought
it was well presented.
Commission is regarded as standard and in line with the market although
Briggs feels it would be nice to have some trail commission.
The panel also agree the charges are fair and reasonable in the market
context, with Hawksworth pointing out they are “in line with the majority
of funds of this type.”
Summing up, Martin follows up his earlier views about the company. He
says: “Apart from the New Wired Index Fund, their other portfoliosare not
Donald Martin, Partner, MacLeod IFAs
Robert Briggs, Principal, Robert Briggs
Stephen Fairhall, Director, RBC(UK)
Stuart Hawksworth, Director, Townends Financial Consultants