The fund was launched in 2008 and replicates the asset allocation service Iveagh provides for its family office clients. It can invest globally in a range of asset classes and has a target return of 10 per cent a year. Exchange-traded funds are used to achieve diversification at minumum cost and since inception, it has produced positive returns of 4.9 per cent. The FTSE 100 produced a negative return of 23.1 per cent over this period.
The portfolio comprises alternative investments such as private equity, venture capital, hedge funds and structured products, real assets including precious metals, natural resources and global real estate), major market equities, emerging market equities, bonds and cash. It aims to increase the portfolio return and reduce risk by making tactical adjustments to holdings on a quarterly basis.
There is no set-up fee for the Sipp as the cost is included in the annual management charge of the Iveagh fund. There is no annual administration charge as long as clients have more than £25,000 to invest in the Iveagh fund but if it falls below this level due to withdrawals, an annual fee of £750 would be charged.
In this case, clients are given three months notice and would not be charged until the end of this period, which gives them to top up the investment to avoid the fee. The fee would not be charged if the fund falls below £25,00 due to market forces.
Apart from the Iveagh fund, the Sipp can hold the usual investments that are allowed within a Sipp, including investment funds, equities, fixed inetrest, commodities, commercial property and cash.
There are no transaction costs, which is a good features as these can often increase cost, but charges are made for additional services such as payment of pension, drawdown arrangements and commercial property investments.
However, some investors may be put off by having to maintain at least £25,000 in one fund, even though it is diversified across a range of asset classes.