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Unicorn tells tale of British legends

Unicorn Asset Management/OC Digest

Outstanding British Companies Fund

Type: Oeic

Aim: Growth by investing in Aim and fully listed British companies

Minimum investment: Lump sum £2,500

Investment split: 75% established companies, 25% smaller companies

Isa link: Yes

Pep transfers: Yes

Charges: Initial 5.5%, annual 1.5%

Commission: Initial 3%, renewal 0.5%

Tel: 020 7253 0889

Unicorn Asset Management’s Outstanding British Companies Fund will use a buy and hold strategy rather than chase short-term price movements.

Flowers McEwan director David Flowers feels that this is an Oeic that will be offered mainly direct to the public. “It has a simple and appealing marketing message although I would like stronger risk warnings,” he says.

Flowers regards the charges as high but fairly standard – although he complains that it is hard to find a mention of intermediaries or commission. “An initial charge of 5.5 per cent is not cheap, but the annual management charge of 1.5 per cent with a total expense ratio a little higher is reasonable for this type of fund,” he says.

Assessing the product literature Flowers says: “Although I baulked at the rather patronising language in the marketing material, I suspect it works with the target audience and it has an attractive story. It’s sort of “let’s not go with sectors, speculation, weightings, timings or styles of investment management, let’s just pick the best British companies and stick with them”. If you are looking for a new story to try and eke out some investment business this may well work,” he says.

He adds that if Unicorn has the nerve to stick with its long-term philosophy, it might be on to a winner.

Turning to the less appealing features of the fund Flowers says: “The language and presentation of the literature is definitely more Sun than Telegraph, which is a bit worrying when you consider the respective journals’ track records of priorities and values. Also, I would like to see more warning notes drawing attention to the fact that this is a very small organisation.”

Considering the main competition for the fund Flowers says: “In investment terms, I don’t know of a similar product. It would cross swords with new launches that try to look different and start with a ‘best of’ type of title. It should actually be in the smaller companies or special situations sector because of the unknown risk profile.”

Flowers concludes: “This is a higher risk investment from a small investment house but which is probably easy to sell because of the marketing message.”

BROKER RATINGS

Suitability to market: Average
Investment strategy: Average
Charges: Poor
Adviser remuneration: Average

Overall 4/10

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