Type: Unit-linked manager of managers fund
Aim: Growth by investing in UK equities managed by TT, SVM and Mirabaud
Minimum investment: Lump sum 5,000 via life products, 20 a month via pension products
Investment split: 100% UK equities
Charges: Annual 0.7% plus annual 0.75%-1% depending on wrapper product
Commission: Subject to negotiation
Tel: 0845 843 2111
The multi manager UK equity focus fund is a new addition to Scottish Widows investment solutions range of life and pension funds. It is managed by SWIP, with multi-manager specialist Russell Investment Group acting as investment adviser. The underlying equity portfolio will initially be managed by boutique firms TT, SVM and Mirabaud.
Informed Choice director Martin Bamford feels this fund will meet the growing popularity for asset allocation models for client investment. He says: The fund offers exposure to the UK equity sector with greater risk and potential for higher returns. The size and expertise of the Russell Investment Group is an attractive feature and there is the comfort of having management monitored by professional researchers.”
However, Bamford is not impressed by the equally shared weighting between the three selected fund managers at the outset. He says: “This demonstrates a lack of conviction on behalf of Scottish Widows. Also, the boutique nature of the managers could put off more cautious investors.”
Bamford regards the charges as high and feels they could also put off prospective investors. He says: “If the research on asset allocation is to be believed, this additional cost cannot be justified, as the majority of outperformance returns will come from strategic asset allocation rather than individual manager performance. However, there is an increasing demand for this type of fund from advisers who cannot devote the time to actively research and monitor the fund manager selection.”
Looking at the competition Scottish Widows will face Bamford notes there are a number of manager of manager and fund of funds providing exposure to the UK equity sector. He cites the Gartmore Portfolio UK high alpha strategy fund as a worthwhile competitor.
Suitability to market: Good
Investment strategy: Good