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TCF launches low-cost funds of funds

TCF Fund Managers has launched four low-cost funds of funds, offering advisers equity in the business in return for assets under management.

The total clarity defensive, cautious, diversified balanced and long-term growth portfolios will have maximum total expense ratios of 0.8 per cent, partly by reducing annual portfolio turnover to 20 per cent or less.

They will feature no initial, exit, switch or performance fees and do not pay commission.

The TERs will also reduce from 0.8 per cent to 0.6 per cent as the funds gather assets under management and benefit from economies of scale.

In a manner similar to new start-up Distinction Asset Management, TCF will offer advisers a maximum stake of 49 per cent in the business, divided according to the proportion of assets under management advised.

Advisers can decline to take a stake in the business if they feel it is inappropriate to do so.

In terms of individual funds, the defensive portfolio aims to protect low-risk clients from inflation. It invests 70 per cent in bonds and 20 per cent in shares, with some exposure to property and other investments and relatively little to more volatile areas of the stockmarket such as smaller companies and emerging markets.

The cautious portfolio is designed to protect moderate-risk clients from inflation. It invests 45 per cent in bonds and 40 per cent in shares, with the balance in other investments and, again, relatively little exposure to more volatile stocks.

The diversified Balanced portfolio is built to grow over the medium to long term for a balanced risk investor, with 60 per cent in shares and some investments in more volatile stocks.

The long-term Growth portfolio is aimed at growth-seeking investors who aim to grow their capital with higher risk over the medium and long term. It will have roughly 80 per cent in equities, with higher exposure to volatile stocks than the other three funds.

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  1. Think I’d rather have an ETF than a TCF!

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