It is good to see Richard Buxton return to the retail market with a new fund – Schroder UK Alpha Plus.
It may look superficially similar to other focus-type launches but the make-up of this fund is very different. The funds look to capitalise on the global strategy experience of Richard and Schroder as well as bottom-up stockpicking skills.
It will have a large/ mid-cap focus with 20 to 40 stocks, which should ensure liquidity is not a problem. There is scope for it to look at preserving capital through difficult times with a 10 per cent cash and 10 per cent gilts weighting if needed.
The fund is looking to be a best ideas trust, through stock/sector and thematic positioning. The focus is on absolute, not relative, return. This is important as I believe the benchmark in terms of the FTSE 100 is more risky than for a long time.
I believe this is the right fund for now because the nature of markets are changing. Stockmarket returns are going to be harder to come by. We could witness a prolonged sideways movement in the market, something which was seen in the Dow Jones between 1966 and 1982, with the Dow hardly moving over those 16 years.
This would be the death knell of the tracker, which is as popular now as the endowment was in its day. Of the latest Isa sales, one-third were bought direct and, of this, 40 per cent were trackers. Investors are making decisions based on the last 20 years – the next 20 could look very different. A golden age of active investment could be opening up and Schroder's new fund might just lead the way.
Mark Dampier is head of research at Hargreaves Lansdown