Schroders has introduced the UK alpha plus fund, a unit trust which invests in a concentrated portfolio of between 20 and 40 UK stocks.
The fund aims to produce capital growth by adopting a mixture of top-down and bottom-up approaches to stock selection. The fund manager, Richard Buxton, will use top-down methods to identify which sectors will benefit from economic trends. He will then take a bottom-up approach, analysing companies at an individual level, to narrow his stock selection down to an initial portfolio of 30 stocks.
Buxton joined Schroders in September 2001 from Baring Asset Management, where he was head of UK equities. He has 17 years experience in fund management and was responsible for the Baring UK growth trust prior to joining Schroders.
Investors who are looking for a higher-risk UK fund with a high turnover of stocks may find this fund of interest. However, there are many funds operating the same investment strategy because the high returns that were possible in the early 1990s are no longer attainable.
Stockpicking has now become more focused on the merits of individual companies, not simply holding stocks within promising sectors, because the performance of two stocks within a sector can vary. This fund's success relative to other funds will depend on the depth of research Schroders makes available to Buxton and whether he buys or sells stocks at the right time.