Royal & SunAlliance has pushed the focus onto individual stock selection with the introduction of the UK prime fund.
This open-ended investment company (Oeic) aims to deliver capital growth by investing in a portfolio of around 30 stocks. However, investors who want to draw income from the fund can make cash withdrawals under a facility called selector. This is only available where at least £2,500 is invested.
Some UK growth funds aim to dilute investment risk through a portfolio of around 100 stocks. The UK prime fund is different in that it has a more concentrated portfolio, which provides the potential for higher rewards that is offset by higher risks. Adventurous investors may find it attractive for those reasons.
The gap between the best performing and worst performing stocks is becoming increasingly wide, especially with the recent volatility of the UK stockmarket, so the stockpicking process is crucial to the success of the fund. Stocks will be selected by the fund manager, Mike Felton, on the basis of in-depth research conducted by Royal & SunAlliance equity analysts. The portfolio of chosen stocks will be monitored on a daily basis.
Felton has been with Royal & Sun Alliance since 1989 and has been managing the Royal & SunAlliance equity fund since 1998.
According to Standard & Poor's, the Royal & SunAlliance equity 1 fund is ranked 67 out of 306 funds based on £1,000 invested on a bid to bid basis with net income reinvested over three years to March 20, 2001.