Royal & Sun Alliance has put the focus on individual stock selection with the introduction of the UK prime fund.
This Oeic aims to deliver capital growth by investing in a portfolio of around 30 stocks. Investors who want to draw income from the fund can make cash withdrawals under a facility called selector which is available if at least £2,500 is invested.
Some UK growth funds aim to dilute investment risk through a portfolio of around 100 stocks. The UK prime fund has a more concentrated portfolio which provides potential for higher rewards but is offset by higher risk.
The gap between the best-performing and worst-performing stocks is becoming wider, especially with the recent volatility of the UK stockmarket, so the stockpicking process is crucial to the fund's success. Stocks will be selected by fund manager Mike Felton on the basis of in-depth research conducted by Royal & Sun Alliance equity analysts. The portfolio will be monitored on a daily basis.
Felton has been with R&SA since 1989 and has been managing the equity fund since 1998.
According to Standard & Poor's, the R&SA equity 1 fund is ranked 67th out of 306 funds based on £1,000 invested on a bid-to-bid basis with net income reinvested over three years to March 20, 2001.