Turning to the main useful features and strong points of the fund, Robinson feels it is simple and straightforward with no frills. MacFarlane says: “It is a straightforward growth trust. The strong brand name associated with Legal & General should help initial sales. However, its performance within the sector will be critical to its longer term popularity and success within the IFA market.”
Gibbon says: “The fund does invest in both large and small caps which could provide a balance against similar funds. The charges for lump sums and higher regular investment are comparatively low if the investment is kept for the medium term.”
Holian says: “Its strengths lie in the fact that it concentrates on a smaller number of well researched stocks and it invests among both smaller emerging companies and larger companies. I would say this freedom could give it an advantage over some other UK growth type funds.”
Discussing the investment strategy, Holian says: “In principle, if the research is as good as the company says it is, then the fund should pick those shares that do well and leave out those that underperform against relevant indices. In particular, I like the concentrated number of stocks.”
Moving onto the disadvantages of the fund, Robinson thinks it makes sense in the current climate as a stockpicking fund. MacFarlane says: “I like stockpicking funds and this fund seeks to follow a clear stockpicking strategy from a concentrated portfolio of stocks. Good fund management has proven that these types of funds can provide excellent returns for investors should the right stocks be selected within the portfolio. Legal & General have a good management team and I am optimistic that the fund will perform well.”
Robinson suggests there will be a lot of competition in this area and that Gartmore's previous performance has been mediocre.
MacFarlane says: “There are no disadvantages unless the fund underperforms against its peer groups. At this stage, the fund will not only become high risk for the investor but also for Legal & General's investment reputation. The fund seems to be filling a rather grey area within the Legal & General UK fund range. It overlaps with many of the objectives of the UK recovery and UK smaller companies trusts.”
Assessing Legal & General's reputation, Gibbon says: “It has a good reputation as an insurers and is developing a reputation in the investment world.”
Robinson says: “It had better performance in 2000, but most of its UK equity funds are mediocre over three to five years.”
MacFarlane sees it as a good brand name with a high degree of public awareness.
Turning their attention to Legal & General's past performance, Holian says: “Although Legal & General do not spring to mind as first choice for unit trusts. I tend to think of them as a traditional type of life office more suited to providing personal pensions, low cost endowments and distribution bonds.”
MacFarlane thinks it is generally quite good across the range of funds but Gibbon has mixed feelings about it.
Identifying the likely competitors for the fund, MacFarlane says: “All funds in this highly competitive sector, but specifically in vogue funds managed by the likes of ABN Amro and Artemis. Many smaller fund management companies are keen to forge their reputation in this sector of the market and it may be difficult for a more traditional investment house like Legal & General to achieve the consistent top quartile performance required.”
Robinson thinks that Artemis UK growth, ABN Amro UK growth and CGNU UK growth will provide competitions for the fund. Holian opts for the new Axa UK opportunities fund and existing funds such as Invesco UK key trends and Liontrust first growth.