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Smith & Pinching lays foundations for Fof

Smith & Pinching Portfolio Management expects to launch its proposed global property fund of funds in June and is putting together the prospectus for FSA approval.

The company will seed the portfolio with money from its bespoke portfolio service and its financial services arm.

The new fund will use the maximum flexibility allowed under the non-Ucits retail scheme structure. It will hold funds that in invest in bricks and mortar as well as real estate investment trusts, direct shares in UK housebuilders and structured products.

Smith & Pinching has also defended its existing funds’ use of benchmarking against the growing tide of absolute return funds with cash benchmarks.

It says the indices are widely recognised by the fund management industry and provide clients with a meaningful and reasonable test for investment returns.

But it concedes that the industry is moving towards cash benchmarks as a more relevant performance test for less sophisticated clients.

Business development manager Richard Carswell says: “It is not a question of us getting stuck in a rut. When we launched the funds, the benchmarks we chose, such as the Apcims Balanced and FTSE Government All Stocks Gilt index, seemed the right ones. They are tough to beat and do not take the dealing costs into account.

“If we started to change our benchmarks, clients could become suspicious. What we could do is entertain an additional cash benchmark. That might be most appropriate for our fixed-interest fund.”

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