Threadneedle UK Mid 250 Fund
Aim: Growth by investing in UK mid caps and small caps
Minimum investment: Lump sum £2,000
Investment split: 100% in UK mid caps and small caps
Isa link: No
Pep transfers: No
Charges: Initial 3.5%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 0800 068 4000
Threadneedle Investments' UK mid 250 fund, aims for growth by investing in a portfolio of between 50 and 80 UK stocks, mainly mid-caps.
Assessing how the fund fits into the market TBO Corporate Benefit investment director Godfrey Bloom says: “Threadneedle is, historically, a strong house with a good track record. There are not too many mid-cap funds about but there are too many funds of all shapes and sizes. Mid caps are flavour of the month at the moment but this has largely been a catching-up exercise after three years of a bear market.” He regards Schroder's mid cap fund as Threadneedle's main competitor.
On the issue of Threadneedle's track record, he does not accept the company has shaken off its weak period through its limited edition fund. However, he does feel Threadneedle's track record in smaller companies stands out from the others.
When asked about the product's weaknesses Bloom says there is nothing he dislikes specifically, but he wonders if there is room for another fund. “Wouldn't Threadneedle do better spending its time giving more resources to its existing funds, which have clearly gone off the boil in the last two years?” he adds.
Bloom's main concern with the product is its charges. “It is difficult to accept annual management charges of around 1.5 per cent which soak up the entire dividend yield. Sooner or later these funds will have to accept 1.5 per cent is too much. I suppose this fund will be bought on a platform like Selestia, where discounted annual management charges can be negotiated. But the real solution is fewer funds with better performance at low cost. “
He is also critical of Threadneedle's investment strategy which predicts more Government spending in the construction industry. “More likely it will find its way in public service union pockets,” he concludes.
Suitability to market Fair
Investment strategy Fair
Adviser remuneration Fair