Type: Oeic fund of funds
Aim: Growth by investing in Oeics, investment trusts, unit trusts, gilts and cash
Minimum investment: Lump sum 5,000, monthly 100
Investment split: 23% UK equities, 16% Japanese equities, 11% global bonds, 9% emerging markets, 9% resources, 8% gilts, 4% Pacific, 3% European equities, 17% cash
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 0118 958 5596
The CF Miton special situations fund is an Oeic fund of funds that is managed using a core and satellite model. Defensive assets such as cash and gilts will provide a low-volatility base and around 30 per cent of the portfolio will go into in special situations funds, including investment trusts.
Bates Investment Services funds analyst Stewart Smith thinks the product provides good asset class and geographical diversification within one fund. He regards it as useful for smaller amounts of money and for clients and advisers who want to outsource asset allocation decisions.
He says: “Special situations is traditionally associated with equities but this fund uses the term within different asset classes It will use investment trusts alongside unit trusts and Oeics, as the managers are looking to take advantage of discount tightening. Investment trusts also help to keep down costs.”
Smith regards the charges and commission as standard. He feels the performance record of the pension fund on which this fund is based is consistent and excellent. He also thinks the experienced and well-regarded investment team is a plus. He says: “The fund is not benchmarked to any index, therefore the management team is able to position the fund according to their views rather than in relation to benchmark weightings. For example there is currently no US equity exposure.”
However, looking at the negative aspects of the fund Smith says: “As this is a fund of funds, the total expense ratio is more relevant than the annual management charge, but this is not quoted within the literature.” Smith also thinks the term special situations may confuse investors not familiar with the underlying structure given its typical association with equities.
Considering which companies and funds are likely to compete with Miton Smith says: “The fund is likely to be compared to other balanced managed fund of funds, such as the New Star fund of funds, Gartmore balanced strategic and Schroders new strategic balanced fund, although given the investment trust element it may be more comparable to the Midas growth fund.”
Smith concludes that the asset mix may place this fund in direct competition with Mitons existing balanced strategic fund.
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average