Like the offshore funds, the Norwich Cautious, Norwich Balanced and Norwich Growth Fund of Funds will be managed for Norwich Union by multi-manager specialist IMS. They will be available directly and through platforms including FundsNetwork, Cofunds and Transact. Isas and Pep transfers are also available.
The funds will be structured as nonUcits retail schemes, allowing fund manager Paul Kim greater investment flexibility relative to funds structured under Ucits III. Unlike Ucits III funds, Nurs funds are able to invest directly in property. They can also hold a bigger percentage of the portfolio in an individual fund and a greater proportion of cash relative to Ucits III funds.
The new funds will mirror the existing Luxemburg domiciled funds and will rely on the IMS asset allocation and fund selection process. IMS selects and blends the funds according to each objective and risk profile. They begin by looking at five-year performance to identify funds that consistently outperform, although they will look at shorter periods for new launches. IMS will also consider factors such as benchmark deviation and will meet the management teams behind the funds. From their analysis, a core fund list and a reserve fund list are generated, from which the final portfolio is compiled.
Stating the case for multi-manager funds, Norwich Union says even if advisers are happy to make asset allocation decisions for their clients, many do not have the time, the resources or the desire to select individual funds and monitor them on a continual basis. Regulatory and administrative burdens also put advisers under pressure, so that advisers are increasingly turning to multi-manager funds.
The company says the offshore status of its existing funds of funds has limited its ability to distribute them. It believes IFAs are more comfortable with the onshore Oeic structure and feels it should have a fund of funds presence in this market.
While the funds have the advantage of the Norwich Union brand name, which may be comforting to clients, some advisers may prefer to access the skills of IMS directly through its own fund range.