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Newton plugs into tech market

Newton plugs into tech market

Newton European High Yield Bond Fund

Type: Unit trust fund of funds.

Aim: Growth by investing in technology funds.

Minimum investment: £1,000.

Investment split: 15 per cent Aberdeen technology, 15 per cent Henderson technology, 10 per cent Scottish Equitable technology, 10 per cent Mercury global titans, 10 per cent GT dynamic theme, 10 per cent Sarasin websar, 5 per cent Framlington health, 5 per cent Schroder medical discovery, 5 per cent Gartmore tech ternado, 5 per cent Framlington net net, 5 per cent Finsbury universal life sciences, 5 per cent Invesco European growth.

Yield: Nil.

Isa link: Yes.

Pep transfers: Yes.

Charges: Initial 3.5 per cent, annual 1.5 per cent.

Commission: Initial 3 per cent.

Tel: 01225 469424.

Keith Lewis, proprietor, Hartley Greatbatch, Robert Graham, associate partner, Scottish Financial Independence Group, Glyn Roberts, principal, Glyn Heulyn & Co, Alison Gaunt, partner, Gaunt Hall Independent Financial Advisers.

Suitability to market 7.8

Investment strategy 7.3

Past performance 7.0

Company’s reputation 8.3

Charges 7.0

Commission 7.3

Product literature 7.3

Newton Fund Managers has introduced the European high yield bond fund, an open ended investment company that invests in European high yield corporate bonds.

Looking at the product’s suitability to the market, Roberts says: "This fits well into a somewhat crowded market, with many corporate bond funds being launched over the last 18 months, many looking outside the UK to get exposure to European telecommunication corporate bonds."

Gaunt says: "The fund offers higher potential income, but possibly also higher risk than some established funds. Therefore this product adds to the choice available to clients."

Graham says: "There are not many funds offering high yields on European bonds. Framlington, M&G and Henderson are the only similar ones. It is at the riskier end of the market in terms of capital maintenance."

Turning to the type of client at the product is suitable for, Lewis says: "This is for clients seeking income that can be paid monthly and who find a yield of 9.45 per cent a year attractive."

Graham says: "The product is for the client who is aiming for very high income from a proportion of their capital and who is willing to take some capital risk."

Roberts adds: "It is suitable for the older client who requires a high level of income and is prepared to look at the investment over a long period. Also it is for a client who is willing to take some risk with their capital in order to gain a very high level of income and one that is convinced that interest rates are not going to rise significantly in the Euro zone in the next few years."

Gaunt feels that the fund is for: "Those requiring a higher level of income, who are willing to take some risk with the underlying investment and who have had the downside clearly explained to them."

Evaluating the marketing opportunities that the product provides, Graham says: "If we suppose that the Euro must eventually strengthen, this could be a good entry to European bonds. The market is growing and broadening rapidly and could be very rewarding."

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