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Stocking up

Smith & Williamson Investment Management has introduced an offshore Oeic that invests in stocks and shares in the UK and overseas, with a smaller proportion going into corporate bonds.

The balanced portfolio fund is designed to complement Smith & Williamson&#39s existing Oeic, the growth portfolio fund. The new fund differs in that it aims to produce a small level of income and capital growth. It also invests in cash and bonds, whereas the growth fund offers 100 per cent exposure to stocks and shares.

The balanced portfolio fund has an income yield of 2.5 per cent, which is lower than the yields offered by income funds that invest mainly in corporate bonds but higher than growth funds which invest entirely in stocks and shares.

It is actively managed but benchmarked against the Association of Private Client Investment Managers and Stockbrokers balanced index. This is an index put together by FTSE and private client investment managers. The weightings of the balanced index are 20 per cent in bonds, 55 per cent in UK stocks and shares, 20 per cent overseas and 5 per cent in cash. According to FTSE, the Apcims balanced index stood at 2499.37 points on November 9, 2001, a five-year increase of 29.45 per cent.

The fund is likely to suit investors who want the tax advantages of offshore investments and to diversify across a range of assets. Investors whose main priority is income may not feel the yield is sufficiently high to be an attractive addition to their investment portfolio.


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