New Star Asset Management has introduced its third fund the New Star UK aggressive fund.
This open-ended investment company (Oeic) joins the UK growth fund and European growth fund in New Star's stable. These earlier funds appeared in July 2001, marking New Star's grand entrance in the retail fund market.
The UK aggressive growth fund aims for capital growth by investing in a concentrated portfolio of between 35 and 40 UK stocks. It will be managed by Tim Steer, who joined New Star in January from Collins Stewart, where he was an analyst. He has also worked as an analyst for Merrill Lynch and HSBC.
Steer will focus on medium-sized UK companies, although they will not necessarily be well-known blue-chips. Instead, many of them are likely to be less well-known companies with stocks that appear undervalued in the current climate where share prices are generally low across the board. The reason for this approach is that New Star believes the lesser known companies offer more dramatic growth potential.
However, this approach and the focus on a fairly small portfolio of stocks makes the fund riskier than broad UK funds such as New Star's UK growth fund. It may attract interest from investors who already have a broad UK fund in their portfolio, but who want to add a more aggressive fund with the potential of higher returns.
According to Standard & Poor's, the New Star UK growth fund is ranked 218 out of 303 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over one month to October 8, 2001.