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Newton Phoenix fired up for asset classes

Newton Investment Management

Phoenix Multi Asset Fund

Newton Investment Management

Phoenix Multi Asset Fund

Type: Oeic

Aim: Growth by investing in a range of asset classes

Minimum investment: Lump sum £1,000

Investment split: 34.5% equities, 18.7% investment grade bonds, 17.1% funds of hedge funds, 14.8% property, 4.2% sub-investment grade bonds, 3% index linked bonds, 1.8% commodities, 0.6% private equity, 0.7% other, 5% cash

Isa link: Yes

Pep transfers: Yes

Charges: Initial 4%, annual 1.5%

Commission: Initial 3%, renewal 0.5%

Tel: 0500 660000

The Newton Phoenix Multi Asset Fund invests in a range of asset classes including equities, bonds, hedge fund products and commodities.

AWD Chase de Vere research manager Justine Fearns points out that although recently launched, the Newton Phoenix fund has actually been running in its current multi-asset form since 1993. “This is interesting given that many of the multi-asset portfolios currently being launched are marketed as new and innovative opportunities,” she says.

According to Fearns, the team behind this fund is well established and has an excellent career history. “There is plenty of information and track record for investors to get their hands on to make sure the fund ticks all the boxes they need. The fund’s track record also means that it comes to market having already reached a reasonable size. Starting at almost £90m will make it a more interesting and viable proposition for some investors,” says Fearns.

Fearns notes that Newton has introduced measures on the fund to help broaden its appeal to the wider retail market. “The investment minimum was reduced to £1,000 and a regular saving facility of £50 introduced, which places the fund firmly in the retail space, whereas the previous higher investment minimum only offered limited appeal in the retail space,” she says.

The objective of the fund is to achieve long-term growth of 2 per cent over Libor with low volatility. “ The managers aim to achieve this by investing in nine asset classes, including, private equity, hedge funds and commodities. The spread of assets are probably familiar to most investors, but some of them have been the domain of high-net-worth investors so will help give retail investors exposure to assets that have previously been difficult to get exposure to or inappropriate to hold in the past,” says Fearns.

Asset allocation decisions are made within the overall themes identified by the Newton house process. “Although decisions are based on market movements, achieving a high level of diversification is central to the decision making and the team refuses to try and forecast fashionable or unfashionable asset classes,” says Fearns.

She observes that in reality, the team expects very few significant changes to take place within the fund, which should help keep costs to a minimum and help keep investors happy. “This is somewhat out of kilter with some other multi-asset funds, where emphasis is placed on taking significant asset allocation calls; there’s no right or wrong, it’s just a case of different skill sets,” she says.

With the multi-asset approach Newton anticipates the Phoenix fund being attractive to a wide range of investors, particularly those wanting low volatility returns on their capital or exposure to illiquid asset classes such as hedge funds or private equity.

“Investors into the fund can also take comfort from having a good investment management house and an experienced team of fund managers and investment specialists in place. Newton is in a good position to offer this type of fund, as it is a large organisation with a number of strings to its bow. The management team, led by Phillip Collins, should be able to leverage off of this helping them obtain good information and prices on the deals it puts in place,” says Fearns.

According to Fearns, the cost to the investor is competitive for a multi-asset type of fund at 4 per cent initial and 1.5 per cent for the annual management charge. Commission is average in her view. Turning to the negative features of the fund Fearns says: “The Phoenix fund is likely to take smaller and fewer bets on asset allocation compared to some other multi-asset portfolios. There is nothing wrong with this approach and, looking at the track record, the Phoenix approach has worked well for well over a decade – it just might not float everyone’s boat.”

In terms of potential competitors, Fearns says: “Midas Capital Partners has been running two multi asset funds for a number of years and prior to the current funds, the managers were managing money in a similar fashion for the Merseyside pension scheme. There are a number of multi manager funds that run money on a multi asset basis too, including Gartmore, Schroders and MitonOptimal’s Arcturus fund, the latest addition to its family of funds.

Fearns believes financial advisers are split on whether this type of fund is good for investors or whether they should be making the asset allocation calls for their clients and investing accordingly.

She concludes: “I think that multi asset portfolios are a useful, if not vital, tool for some advisers and would be an ideal core for many client portfolios. Multi-asset portfolios cover a number of bases and can really help IFAs deliver a good level of service to their clients. They may not be the only thing to recommend and investors do still need to make sure their monies are spread across different providers but they offer a number of benefits.


Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Average

Overall 7/10


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