Aim: Growth by investing in European equities excluding the UK
Minimum investment: Lump sum £1,000, £100 a month or £50 each New Star fund
Investment split: 100% in European equities excluding the UK
Isa link: Yes
Pep transfers: Yes
Charges: Initial 5.25%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 0845 608 8702
The New Star European Value fund is a rebrand of the former Tilney European growth fund.
Considering the plus points of this fund Morgans Independent Advisers director Martin Dilke-Wing says: “The product is good for IFAs and their clients in that it rebrands an existing fund that is probably unknown to most IFAs to a management group that will be familiar to all IFAs by virtue of the transfer of Tilney funds to New Star.”
Dilke-Wing notes that the fund has achieved a small to medium fund size over the past 10 years and admirable performance. He regards the investment processes as well thought through and the charges as fair and reasonable. “How it will dovetail in with the other New Star European offerings remains to be seen as it appears to be likely to provide a degree of duplication. I suppose this is not the IFA’s problem and it can be surmised that their may be minor changes to the investment mandates for the funds in their stable in order to ensure that they are all individually identifiable in terms of remit and objectives,” he says.
Turning to the potential negatives, Dilke-Wing is hard pressed to find any. “What’s not to like? The performance is strong, the process is clear. If you buy into Nick Sheridan’s model for stock selection, you will invest in the fund – if you don’t, you won’t.
“This will, as with all funds, be largely driven by whether it outperforms the competition. For a core holding of large cap European stocks with no apparent top down national economy or sector bias, it would appear to be a strong proposition,” he says.
According to Dilke-Wing, the main competition is likely to be provided by the established funds in the sector with proven track records. “Current favourites would include the existing New Star European growth fund as well as the Resolution European growth and alpha funds, “ He also mentions funds from Singer & Friedlander, Old Mutual, Artemis, Fidelity and Jupiter.
Dilke-Wing concludes: “It will be interesting to see how New Star markets this fund and how it will be integrated into its range. If one assumes that this is achieved with its usual professionalism and efficiency, it is to be expected that the fund will prove to be great success and a valuable addition to their range in the short term – markets permitting of course.”
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average