This month has seen a number wave of new fund launches, with a number aimed at those looking for greater diversification in their portfolio. These include ones invested in infrastructure and blockchain technology.
There have also been several fund managers launching UK-based versions of offshore funds. These funds have built up decent performance figures, and the managers no doubt hope the OEIC structure should widen the appeal to UK investors.
It has also been a busy month in the investment trust industry, with a number of mandates changing hands. One investment trust board has initiated this process, in a bid to improve performance. But – more unusually – an investment manager has also served notice after a dispute about fees, after a period of quite stellar performance.
Threadneedle Launches UK Version of Global Focus Fund
Columbia Threadneedle has launched an onshore version of its Global Focus Fund, managed by David Dudding. This fund, which has £456m under management, had until now has only been available as a Luxembourg-based SICAV.
The UK version will follow the same process and investment strategy.
Dudding says his approach is to identify quality growth companies, which have the potential to deliver over the longer term: “We identify economic moats, how likely companies are to keep competitors at bay for an extended period. We believes that well governed companies can sustain higher returns for longer periods than the market assumes.”
Darius McDermott, of Chelsea Financial Services says: “We like the manager and this fund.”
New ‘Blockchain’ ETF
First Trust Global Portfolios (FTGP) has launched a blockchain ETF, which invests in companies that are either actively investing in this sector, or have products which may benefit from blockchain technology.
It is thought this is the first ETF in Europe offering exposure to this niche tech area. Blockchain enables users to keep transactions secure in a decentralised database or “digital ledger”.
FTGP has worked with index provider Indxx to create this blockchain index, which initially consists of 82 companies.
To appear in this index companies must have a minimum market cap of $250m, and a minimum three month average daily turnover value of $1m. The index will be rebalanced twice a year, and capped at 100 stocks.
This will be a physically replicated ETF.
L&G launches Global Infrastructure Fund
Legal & General Investment Management has launched a Global Infrastructure Index fund. This will have an ongoing charge of just 0.2% and will track the FTSE Global Core Infrastructure index, which consists of more than 200 companies spread across 30 countries.
Honor Solomon, head of retail EMEA at LGIM says this fund will offer “an attractive combination of capital growth and a stable income stream, in many cases linked to inflation.”
Listed infrastructure has become increasingly popular with investors, she says, particularly given its “modest correlation” with traditional asset classes such as equities and bonds.
“Infrastructure assets such as roads, railways, and pipelines are essential for our economies to function.”
Jupiter Launches New Global Value Fund
Jupiter has announced it will launch a UK version of its Global Value fund. This will mirror its Luxembourg-listed fund, run by Ben Whitmore and Dermot Murphy.
The fund aims to target capital growth over the longer term by investing in global companies which the managers think are currently undervalued.
Whitmore says: “We see a clear opportunity in this environment to construct a globally diversified portfolio of companies. Value as a style of investing has had its worst period of relative under-performance versus growth investments since the late 1990s, therefore we think this is an opportune starting point at which to launch a fund.”
These fund managers also run the £2.4 billion Jupiter Income Trust and the £1.8 billion Jupiter UK Special Situations fund. Both are highly rated by Morningstar. Jupiter Income has a four star and bronze medal rating, while the UK Special Situations fund has a five star and Silver Rating from Morningstar.
Baillie Gifford Wins Mandate for Schroder UK Growth
Schroders has lost the mandate to manage the Schroder UK Growth (SDU) investment trust after a period of disappointing returns. This has led to a prolonged period where the trust – which has a net asset value of £259m – has traded on a double-digit discount.
The board announced that the investment mandate will be awarded to Baillie Gifford.
Managers Iain McCrombie and Milena Mileva will be run the investment portfolio.
In a statement the board says: “In order to provide the best investment outcome for existing investors and to position the company to attract new investors [the trust] should make the change to implement a new ‘best ideas’ investment approach, managed by Baillie Gifford.”
An exact date for this change of management has yet to be announced but the handover is expected after a three month period. The trust will be renamed Baillie Gifford UK Growth (BGUK).
Invesco Quits Flagship Investment Trust
Invesco has given written notice that it will no longer manage Invesco Perpetual Enhanced Income Trust (IPE). This is the result of contractual disagreement between the investment manager and the board of the trust. It is thought this involves disagreements over fees.
Invesco has managed this trust for over a decade. Originally the managers of this trust were Paul Causer and Paul Read, although it has been managed by Rhys Davies since 2014.
The trust is currently trading on a 8% premium, having outperformed its benchmark over one, three and five years. It has a three-star rating from Morningstar.
Invesco will continue to manage the trust for the next 12 months, during which time the board will look to appoint new managers.
Name Change for Baillie Gifford Fund
Baillie Gifford will change the name of its £715m Corporate Bond fund, to the Baillie Gifford Strategic Bond Fund, from May 1.
The fund manager said this name change was to “more accurately reflect its strategic approach”.
Baillie Gifford reassured investors that the fund’s investment philosophy remains unchanged, following the same “through the economic cycle” approach it has used since 1999.
The fund has a global remit and invests in investment grade and high yield bonds.
At the same time the co-manager of the fund Stephen Rodger will step down, having announced his retirement earlier this year.
From this date the fund will be managed by Torcail Steward and Lesley Dunn.
