Mirroring the asset allocation of an existing actively managed fund, the T Bailey growth fund lite will be a passive-only fund of funds investing in exchange traded funds and trackers.
The investment boutique says its fund of funds team will combine global asset allocation and active management with cost-effective passive instruments.
T. Bailey chief investment officer Jason Britton and fund manager Elliot Farley will run the fund. Britton says the fund offers the performance and risk benefits of active portfolio management and the cost savings of passive investing.
The fund’s strategic asset allocation at launch will be 25 per cent in America, 25 per cent in the UK, 17.5 per cent in emerging markets, 15 per cent in Europe ex-UK, 7.5 per cent in Japan and 10 per cent in the Pacific Basin ex-Japan.
The launch is set for later this month and is subject to approval by the Financial Services Authority.
T.Bailey head of marketing and communications Philippa Gee says: “Investors can be assured that this TER isn’t just an introductory offer that will drift outwards in a few months.”
Britton says: “Passive investing is more complex than is often credited – over the long term many trackers seriously underperform the index they’re following, then there are issues of cost, risk and, of course, the challenge of building a sensibly balanced portfolio.
“It’s not surprising that many investors just opt for a FTSE-100 tracker. But then they end up with more money in Cadburys or British Airways than in emerging markets. This fund is ground-breaking in that it offers the performance and risk benefits of active portfolio management and the cost savings of passive investing.”