View more on these topics

Old Mutual spreads its bets on smaller companies

Bruce agrees. He says: "It is managed by an investment team led by Ashton Bradbury. Ashton has more than 10 years experience in the small caps area of the market. There is also the flexible approach to fund management and the fact that it has achieved a Standard & Poor’s AA fund rating."

Chitroda says: "The fund has a focused investment approach and an AA Standard & Poor’s rating. Other plus points are the fact that it has an initial charge of four per cent and an experienced fund manager with a reasonable track record."

Turning to the other side of the coin, Campbell thinks that one drawback to the product is that it is not for the novice investor, while Bloom says: "Managers do not often perform well in a new environment. For example corporate culture ate Close Bros, where one of the fund managers comes from, and Old Mutual are miles apart. Will professional synergy work between the team members or will there be a clash of styles? Flair and actuarial science do not always make good bedfellows."

Lakey says: "Smaller companies funds will always be more volatile. Economic pessimists may feel that the timing of the launch is, perhaps, three years too late."

Looking at the fund strategy Chitroda says: "There does not appear to be any clear strategy. It appears to be set to react to market conditions and changes in business cycles. I suppose the only benefit appears to be the intention of obtaining consistent returns."

Bruce says: "Bradbury has proved that his investment strategy has worked well over the past ten years or so. He will therefore have a flexible approach."

Bloom says: "I like the idea of capping exposure to any one stock at five per cent and I think that the stock numbers of about 50 to 60 are about right. I also like the ability to invest in the Alternative Investment Market to £1 billion cap stocks, which should give the managers enough discretion to make bold sector plays."

Casting an eye over Old Mutual’s reputation in the market, Chitroda says: "Old Mutual is not a very well known name. It appeared a few years ago to be making a name for itself, especially on the back of the performance of its European fund. This subsequently faded and so has the old sparkle. Perhaps a higher marketing profile to IFAs could help, along with the introduction of annual trail fees."

Bloom says: "Old Mutual is a sort of South African Standard Life – a safe pair of hands," while Lakey says: "After a prolonged period of mediocrity it seems to be determined to become a major force in the market. The indications are positive and its reputation is improving."

Identifying the funds which provides the main competition to the product, Bruce points to the Hill Samuel UK smaller companies, HSBC UK smaller companies, Gartmore UK smaller companies, Jupiter UK smaller companies and Aberdeen UK emerging companies funds.

Chitroda says: "The competition would come from funds like Artemis UK smaller companies, Gartmore UK smaller companies, BWD UK smaller companies, Duncan Lawrie UK smaller companies and Rathbone smaller companies."

Bloom adds: "I see competition from the Capel Cure Sharp smaller companies fund, BWD Rensburg smaller companies and perhaps the new team at Threadneedle."

Looking at the charges, Campbell says: "The charges are standard, although the annual management charge is relatively high at 1.5 per cent. However you are paying for an actively managed fund."

Chitroda says: "The initial charge of four per cent is very reasonable compared to the typical five to 5.5 per cent for other products. The annual management charge of 1.5 per cent is normal."

Moving on to the product literature, Lakey says: "The literature is very good. The stockwatch case studied allowed an insight into the selection process."


Annuity liabilities still to be resolved

The thorny problem of Equitable&#39s guaranteed annuity liabilities has still to be tackled despite the Halifax deal for the salesforce, admin and fund management. Halifax will pay a further £250m to Equitable if policyholders reach an agreement but it will not be involved in working out a compromise. Equitable will be battling it out alone […]

New philosophy from Cicero Consulting

A new public affairs consultancy has been launched by former Money Marketing journalist Iain Anderson and former colleagues from the public relations firm Golin/Harris Ludgate. Cicero Consulting is aiming to establish itself as a firm offering clients public affairs and Government relations assistance. Based in London, the founders hope to establish offices in Brussels and […]

GE Capital gives up chase for Equitable

GE Capital has abandoned its attempt to buy Equitable Life. GE Capital had made an improved offer to Equitable, after the mutual had reached an agreement worth up to £1bn with Halifax last Monday. The GE Capital offer was worth £1.5bn, £400m of which consisted of a loan. The balance would have been made up […]

Will white knight rescue Equitable and the industry?

The horror story may be over for Equitable Life as Halifax emerges as the long sought after white knight. There are problems with the proposed £1bn deal, notably that one-quarter of the money is contingent on the agreement of policyholders while, more worryingly,a further quarter depends on the future performance of the salesforce. But a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm