Type: Unit trust
Aim: Income and growth by investing in a portfolio of European blue chip stocks excluding the UK
Minimum investment: Lump sum £1,000
Investment split: 100% in European blue chip stocks excluding the UK
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5.25%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 0845 608 0942
This fund aims for income and growth by investing in a portfolio of European blue chips, excluding the UK.
Looking at how the fund will fit into the market Flowers McEwan director David Flowers says: “We are not short of a few European funds in which to invest but PSigma thinks now is the time with various indicators making this sector look attractive.”
Flowers points out that the fund is aiming to capture the income market and does not have many direct competitors. “The investment strategy is promoted as different but seems reasonably predictable and trustworthy – looking for undervalued companies and ones with potential to turn round,” he says.
In Flowers’ view, the literature is standard and minimal, but the website provides sufficient information in a relatively accessible way.
“The charges are a predictable 5.25 per cent initial and 1.50 per cent annual unless you buy at institutional rates which are nil and 0.75 per cent respectively,” he says.
Discussing the potential downsides, Flowers says: “The product is promoted by PSigma, a new private client investment manager, and does not seem to be aimed at the wider IFA market. The company has a rather involved structure including a partnership with an actuarial firm, which provides most of the background machinery and a boutique investment adviser, 2CG, which manages the fund.
Flowers says the personnel involved have a good track record in managing people’s money and running investment houses. He thinks they may attract business and prosper. “At PSigma, Bill Mott is a leading light, with Graham Fuller and Ian Chimes running things. The investment managers at 2CG – Charles Glasse and Christopher Garsten – have a good track record with M&G prior to launching their own boutique.”
Considering funds that could compete the Psigma fund, Flowers notes that as an income fund that excludes the UK, it does not have many direct competitors. “The Fidelity European fund is cheaper and has a straightforward story. Prudential runs a low cost European tracker that pays income, although it includes the UK,” he says.
Summing up Flowers says: “It is all a bit complicated for me and I am not convinced from the marketing that the company really wants our business. Even if it did, I would be waiting for some track record and a reduction in the charges.”
Suitability to market: Average
Investment strategy: Average
Adviser remuneration: Average