View more on these topics

Ingenious keeps a narrow focus

Ingenious Asset Management says it decided against a fund of funds structure for its UK equity fund because it wanted to create a fund that was precision engineered.

Managing director Guy Bowles says he does not like the fact that fund of funds managers buy products that already exist and were not created specifically for them.

He also feels that however funds of funds are structured, they cannot get away from a second layer of fees. He says he did not want to create a fund that was going to be expensive or a package of funds created for other purposes. This led him to favour a multi-manager focus fund, where three managers each run a concentrated portfolio of 10 stocks.

Bowles says focusing on 10 stocks means the underlying managers cannot have any padding in the portfolio or small holdings which can act as a drag on performance.

Managing risk and protecting the portfolio on the downside was important to Bowles when he established the UK equity fund four-and-a-half years ago.

He considered investing in derivatives but did not want to limit the upside potential of the fund by paying commission to investment banks. He also considered investing in a portfolio of tracker funds to keep costs low but felt that as they follow the direction of the market, they are not always low risk.

Bowles says: “I wanted a similar level of risk to the market but with the ability to beat it. I think focus funds are a good idea and this is a multi-manager focus fund that allows me to impose rules on the managers. For example, I insist that if the price of a stock has halved, the manager either sells or doubles up.

“The managers must take a view on whether the stock has gone wrong or is incredibly cheap so that they should add to it. I will not allow them to sit on their hands and they like this because it is good housekeeping.”

Recommended

Zinkula becomes COO at L&GIM US

Legal & General Investment Management has appointed Mark Zinkula as chief executive officer of L&G Investment Management America.

Columbus buys Orchard Lane

Wealth manager HFM Columbus has acquired independent financial adviser firm Orchard Lane.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com