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Product matters

With the end of the tax year fast approaching, this is the time when

investment houses pull out all the stops to bring exciting new funds to the

table. This season will be no exception but what we will see is a bias

towards the more cautious end of the market.

The balance between equities and bonds is essential in providing a more

robust investment strategy that includes diversification across different

asset classes.

New Star&#39s distribution fund offers a solution in providing a balance

between bonds and equities. It sees the return of Theo Zemek to fund

management. She will make the macro decisions on asset allocation,

diversification and overall control of the portfolio. She is joined by

former M&G colleague James Gledhill, who runs the newly-launched

high-yield bond fund for New Star. With their combined track record at

M&G, where they ran a highly successful bond team, they can only be

seen as positive for the launch of this new fund.

Toby Thompson, who last year moved from Newton to join the New Star team,

will manage the equity element. His track record is consistently above

average. With this combined experience, this fund will be ideally placed to

succeed in volatile markets. The robust strategy will provide investors

with asset class diversification and serve the requirements of a more

cautious to medium-risk investor.

The proposed asset split will be 35-40 per cent equity income and 60-65 per

cent bonds, depending on market conditions. The charges – 5 per cent

initial and 1.25 per cent annual – are perhaps a little more expensive

than, say, the Jupiter distribution fund, but this should not deter

potential investors.

Kerry Nelson is a senior investment adviser at Bates Investment Services


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