Vanguard Launches Low Cost Platform

NEWS YOU CAN USE: Last month - a new fund platform launch, Fidelity CIO steps down, Woodford bets on banks and Franklin Templeton re-open soft closed fund

Emma Simon 5 June, 2017 | 3:54PM
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After a year of strong stock market growth, last month has seen a wave of new launches: this includes new investment platform as well as a range of new funds. Further details were revealed on who will manage the new People’s Trust, and there was also news of a new financial education campaign.

Vanguard Launches Low Cost Platform

Vanguard has launched a new investment platform, which it claims will lower the cost of investing for consumers. This platform will be marketed directly to consumers, effectively cutting out financial advisers and execution-only brokers. 

However, it will only offer access to 65 Vanguard products. These include a range of ETFs, target retirement funds, plus its actively managed portfolios.

The platform will have a charge of just 0.15% for the first £250,000 invested and there will be no administration charges for investments above this limit. Investors will also pay investment management fees: these range from 0.06% for its FTSE100 ETF to 0.8% for one of its global emerging market fund.

The platform will allow investors to put their money into ISAs and Junior ISAs and Vanguard said it hoped to offer a SIPP wrapper through the platform soon.

Launching the new platform, Sean Hagerty, managing director of Vanguard Europe, said it was “designed to help simplify and lower the cost of investing in the UK” after the Financial Conduct Authority (FCA) criticised the charging levels within the asset management market. 

Woodford Bets on Banks Again

Neil Woodford, the veteran fund manager who now runs his own asset management company, has invested a significant stake in Lloyds Bank (LLOY). This is his first significant investment in the UK banking sector for a number of years. He cited increased confidence in the lender, and an improved domestic economy.

Woodford watchers will note that this may mark a change in direction for the fund manager. He also sold his holding in GlaxoSmithKline (GSK), the first time he has not held shares in this pharmaceutical giant for 15 years. He blamed the company’s faltering growth and limited ability to deliver value for shareholders.

New Artificial Intelligence Fund

A new fund hopes to capitalise on developments in the field of artificial intelligence. Then fund is being launched by Smith & Williamson and will be run by London-based managers Chris Ford and Tim Day, who joined the company from Pictet last year. The fund, which is due to be launched this month, will run a concentrated portfolio of 30 to 35 companies who derive most or all of their revenue from AI or robotics.

Interestingly, AI will be used as part of the investment process to help identify suitable stocks. The fund will invest across different sectors of the economy and different geographic regions.

Ford said: “AI is powering the fastest growing areas in the global economy and companies are increasingly seeking to capitalise on the opportunities this brings.

“The influence of AI will continue to grow and it will not be limited to one sector of the economy or to one global region.”

Axa Launches New Bond Fund

Axa Investment Managers has extended its range of fixed income funds, by launching a new Global Short Duration Bond fund. 

This fund will only invest in fixed income assets that have a maximum term of five years; this will include investment grade bonds, high yield bonds, inflation-linked bonds and hard currency emerging market bonds. 

Axa said the focus of this fund would be on mitigating the risk of rising interest rates and managing the subsequent volatility this may bring.

The fund will be managed by Nicolas Trindade. It is the ninth fund in AXA IM’s short duration bond fund range. 

Frontier Markets Fund Re-opened

Franklin Templeton have re-opened their Frontier Market fund at the end of May. The fund was soft-closed in 2013, due to large inflows. At the time this Luxemburg-domiciled fund has some $2.1 billion assets under management. Today these has fallen to just $880 million.

The firm said its decision to reopen this fund was based on improved outlook for this asset class, and the potential to deliver higher yields. 

The fund was launched in 2008 and at the time was managed by veteran manager Mark Mobius, now executive chairman of Templeton. The fund is now managed by Carlos Hardenberg.

Chelsea Launches Fund Range

Chelsea Financial Services is the latest broker to launch its own ready-made fund portfolios. The broker will launch four different portfolios: including cautious, balanced, aggressive growth and monthly income. Each will invest in a range of actively managed funds, investment trusts and index-tacking ETFs.

The funds for each portfolio will be picked by the broker research team, led by managing director Darius McDermott. 

The funds will launch at £1 per share following a fixed offer period up until June 5. Investors will pay annual ongoing charges of between 1.49% and 1.8%. Most of this will comprise of fees paid to the underlying fund managers chosen by Chelsea, although the firm will take 0.3% a year as its investment management charge.

The People’s Trust Unveils New Managers

The People’s Trust, the crowdfunded low-cost investment trust, has unveiled the list of managers who will run its portfolio.

These include highly rated managers from JO Hambro, First State and Artemis. They will run the Global, Asia-Pacific and UK Smaller Companies portfolios respectively. Managers from Comgest will run the European portfolio, while managers from Lansdowne Partners will run the Clean Energy portfolio.

In addition, a portfolio of social impact investments starting at a 1% position and potentially rising to up to 5% of assets will be managed by Big Issue Invest, the social investment arm of The Big Issue Group.

The Trust, which is being launched by Daniel Godfrey, a former head of both the Investment Association and Association of Investment Companies. 

The trust aims to deliver sustainable long-term returns, measured over a seven-year period, while having a positive social impact.

New Financial Education Campaign

TISA, the Tax-Incentivised Savings Association, is co-ordinating a £1 million campaign which will help provide basic lessons in managing money for primary school children. 

The project, called KickStart Money aims to teach children across the UK how to manage personal finances better. In will be run in conjunction with schools and hopes to make the next generation more financially literate. 

The campaign is backed by a number of high profile financial companies including: Aberdeen Asset Management, Alliance Trust Savings, Aviva, BlackRock, Henderson Global Investors Old Mutual Wealth, Prudential, Schroders and Standard Life. 

This project represents a “serious statement of intent” by the financial services sector get ensure that financial education becomes a compulsory part of the primary school syllabus.

Fidelity Loses Chief Investment Officer

Dominic Rossi is stepping down from his role as chief investment officer for global equities at Fidelity. He will move to a part-time position within the business, from January next year. No replacement has yet been announced. 

Rossi held this post for seven years, and prior to this was chief investment officer at Gartmore. His new role will see him become a special adviser on public policy initiatives. This will involve liaising with policy makers, regulators and key stakeholders on behalf of Fidelity.

He said the decision to scale back his workload was for ‘personal reasons’. In a statement Rossi said: “After 30 years as an investor, including a decade as a CIO, I have made a personal decision to make a change from a lifestyle perspective.

“It is also time to take on a new challenge in the business. I am passionate about public policy and ensuring that policy making and regulation makes sense for our clients and does not have unintended consequences.”

 

 

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
GlaxoSmithKline PLC1,794.80 GBP0.00Rating
LF Equity Income A Sterling Acc3.43 GBP0.00
Lloyds Banking Group PLC0.76 CHF0.00
Templeton Frontier Markets A(acc)USD21.02 USD-0.10Rating

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk