Insight Investment has established the 24th fund in its stable, the UK dynamic fund.
This Oeic aims for capital growth by investing in a small portfolio of between 25 and 40 stocks. It is benchmarked against the FTSE all share index, but will not be constrained by the sector weightings of this index.
Neil Pegrum, who joined Insight from M&G in December 2002, will manage the fund. He spent 16 years at M&G, where he managed the M&G British opportunities fund. He is also responsible for Insights UK discretionary fund.
With the UK dynamic fund, Pegrum will look for undervalued UK stocks. As the portfolio is so small, every stock will count towards the performance of the fund.
Pegrum will take a three-step approach to constructing the portfolio. The first step involves assessing the quality of the business, the second is to consider the business opportunity and the third is to predict how far the share price is likely to move upwards.
Pegrum will monitor the portfolio closely and stocks will be sold when they reach their target share price. They will also be sold if the factors that lead to their selection change for example, if their growth potential no longer looks promising.
Investors who are brave enough to invest in equities during the current environment of volatility and low returns may be looking for a more adventurous UK fund such as this. The domestic economy has remained relatively strong during the downturn and some investors may decide it is worth taking the higher risks involved to boost their potential returns. However, as a new fund from a new company, the UK dynamic fund could be disadvantaged by its lack of a track record.