Threadneedle is to launch a UK growth fund investing mainly in mid-cap companies after the strong rally in the FTSE 250 over the past few months.
The UK mid-250 fund will be run by smaller companies manager Paul Cramp, who will invest in 50-80 stocks from the FTSE 250, which has risen by almost 50 per cent since March.
Despite the focus on mid-sized firms, Cramp will also seek opportunities in small caps, with many constituents of the FTSE 250 also featuring in the Hoare Govett smaller companies index – the benchmark for his £95m growth fund.
Cramp, who says the fund will not be a closet tracker, expects the current environment of low growth and low inflation – which he believes favours nimble mid caps – to continue in the medium term.
From the fund's launch from September 8-12, Threadneedle is discounting its usual 3.75 per cent initial charge to 3 per cent. Management charge is 1.5 per cent. Commission is 3 per cent, with 0.5 per cent trail.
Cramp says: “The fact that many of the companies are often not well researched gives us the opportunity to add a great deal of value for our investors.”