Norwich Union – World Leaders Fund
Aim: Growth by investing in global equities
Minimum investment: Lump sum £1,000, monthly £50, Isa lump sum
£500, monthly £50
Investment split: US 40%, UK 20%, Europe 30%, Japan 7%, other
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5.25%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 0845 6072439
Broker panel: –
Iain Campbell - Partner, Macleod IFA
David Cuthbert - Corporate sales manager, Russell Plaice & Partners
Jonathan Mapp - Independent financial adviser, Gee & Co
Broker ratings: –
Investment strategy: 7.6
Past performance: 7.5
Company's reputation: 8.0
Product literature: 7.0
Norwich Union has introduced its World Leaders fund, an Oeic which invests in global equities.
Looking at how the fund fits into the market, Cuthbert feels that it is suited to the higher risk and more sophisticated end of the market.
Campbell says: "It fits into the market well, bringing a themed approach to investing in the global growth sector."
Turning to the type of client the fund is suitable for, Mapp says: "This is a global thematic fund for seasoned investors, looking for long term capital growth that are willing to take a medium to high level of risk. Not suitable for widows and orphans."
Campbell says it will be appealing to: "Clients who already invest in UK funds and are now looking for some exposure to overseas equities without high risk."
Cuthbert feels that it is suitable for the type of client that already has a reasonable amount of money invested in lower risk products, is prepared to look at higher risk investment and is able to leave it for the longer term.
Identifying the marketing opportunities the fund will provide, Mapp says: "The fund provides limited marketing opportunities, as it will appeal to a limited sector of investors."
Campbell thinks it is placed to take advantage of recovery of blue chip companies in the world economy and has a quality fund manager in Michael Jennings.
Cuthbert says: "The fund provides a more sophisticated type of fund which probably will be suitable for high net worth individuals who already have a portfolio of Peps and Isas."
Analysing the main useful and strong points of the fund, Cuthbert points out the funds strategy of geographical and industry spread with currency hedging to help reduce currency risk.
Mapp says: "This fund is definitely a stock pickers fund, as the manger will be looking to find the best companies in the world regardless of geographic location or domicile. His investment approach will be flexible, as his investment mandate is fairly wide with him not being constrained by the index, although the benchmark will be the MSCI World Index and therefore can significantly deviate from this. Investors should be prepared for a rough ride."
Campbell lists the past performance of the fund manager, the team approach, active fund management and sensible risk management as strong points of the fund.
Discussing the investment strategy of the fund, Campbell says: "The thematic approach gives the investment team a wide degree of flexibility. Once themes are identified blue chip companies are selected which are expected to produce the higher growth."
Cuthbert says: "The identification of core themes on a global basis together with the management of risk within the started limits should produce good results in the long term."
Mapp thinks the fund has four clearly defined themes, which have been identified as long-term trends, which further illustrates that investors need to be there for the long term. He says: "Companies selected will need to fall into one or more of the themes. It is expected that the fund will have a large cap bias. The investment themes differ compared to other themed funds in the sector so will provide a different approach for investors."
Turning to the funds disadvantages, Cuthbert feels that it is probably too ambitious for those of a nervous disposition, particularly in view of recent and current stock market performances.
Mapp says: "The fund being globally invested will pose a currency risk but this will be hedged against sterling."
Looking at Norwich Union's reputation, Cuthbert thinks that it has a very good reputation and that it is a large well-managed company. Campbell feels Norwich Union is a well-known and respected company.
Mapp says: "Norwich Union through Morley are building a strong fund management and research team which is harnessing their growing international expertise and has enabled them to attract good fund managers. This will continue to build their reputation."
Turning to Norwich Union's past performance, Campbell feels it has a growing reputation as a quality fund manager, with a number of highly rated funds in its portfolio.
Cuthbert says: "Its performance has been good in recent years but not particularly exciting in the more distant past."
Discussing the funds main competition, Mapp lists Fidelity international, Gartmore global growth, Invesco Perpetual international core, Merrill Lynch global titans and Aberdeen global champions. He says: "However, they all have a slightly different approach, geographical weightings, different risk controls, different objectives etc and therefore are not strictly comparable."
Cuthbert says: "Probably the Selestia fund platform with the risk profiled asset spread and wide selection of quality funds available on a worldwide basis."
Campbell says: "It will be interesting to see how this fund compares with other funds labelled as thematic, such as Newton and Sarasin."
Commenting on the charges, Campbell says: "At 5.25 per cent initial and 0.5 per cent annual management charge, they are on the high side. The highest charges of all Norwich funds."
Cuthbert says: "A little on the high side compared to the average but probably reasonable in view of the type of fund." Mapp thinks they are typical of funds available in the sector.
The panel agree that the commission payable is fair and reasonable.
Analysing the product literature, Campbell says: "It provides all the relevant details in a straight forward manner."
Cuthbert describes it as attractive, easy to read and informative." Mapp says: "The product literature is clear but the appeal is not inspiring, which is typical of Norwich's standard approach."