August Fund Launches Cater for Income Investors

NEWS YOU CAN USE: This month saw a raft of new fund launches, plus a less than welcome rise in platform fees

Emma Simon 30 August, 2018 | 12:32AM
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Investors’ appetite for income has not abated, and this demand has prompted two new fund launches this month. Premier Asset Management is using higher risk “call options” to target higher income for investors. Meanwhile RWC is launching a new value-oriented equity income fund, run by the duo who successfully managed Schroder Income in the Noughties.

With interest rates rising again this month – albeit by only 0.25% – there is speculation that value-based funds, which have been out of favour for years, may start to perform better when compared with growth-oriented strategies.

These weren’t the only fund launches this month: Legg Mason launched a ‘best ideas’ bond fund, while Aberdeen Standard becoming the latest fund manager to jump on the artificial intelligence bandwagon.

Elsewhere Charles Stanley delivered a blow to investors who use its online stockbroking services by hiking fees. This comes at a time when there has been increased pressure on fund managers to reduce fees. It remains to be seen whether other online platforms will follow suit.

Premier Launches New Optimal Income Fund

Premier Asset Management will launch a new Optimal Income fund in September, targeting a 6% yield. The fund will be co-managed by Jake Robbins and Geoff Kirk.

Premier says this new fund combines the firm’s “strong track record” in global equities with its capability to enhance income through covered call options.

Robbins will be responsible for the active stock selection on the global fund, with Kirk overseeing the covered call options.

The equity part of this fund will mirror Premier’s Alpha Growth, which Robbins has managed since the end of 2011.

RWC To Launch New Equity Income Fund

RWC will launch a “high conviction” equity income fund in October, run by veteran managers Nick Purves and Ian Lance.

Both managers, joined RWC in 2010, after previously managing the successful Schroder Income fund.

The new fund will hold between 25 and 45 stocks and will adopt a value strategy approach – similar to the approach adopted at Schroder. Around 80% of the fund will be in UK stocks, with up to 20% in global equities.

RWC says that the launch of this fund comes on the back of renewed interest in value investing. Gary Tuffield, head of UK sales at RWC says: “Investors are sounding the alarm bell around the extreme valuation of growth stocks and are rotating into value names as monetary policy becomes less supportive.”

He pointed out that there is a “scarcity of value managers left” after growth strategies have outperformed over the past decade.

Legg Mason Launches ‘Best Ideas’ Bond Fund

Legg Mason has expanded its fixed income fund range with the launch of a new global bond fund. This will be an absolute return fund, aiming to deliver positive returns in all market conditions.

The fund, managed by David Hoffman, Steve Smith, Jack McIntyre and Anujeet Sareen, will invest in the “best ideas in global fixed income markets” with a focus on sovereign debt markets and currencies.

This will be a Dublin-domiciled fund. The teams work for Legg Mason’s Brandywine Global subsidiary.

The fund has an annual management charge of 1.5%. Legg Mason says the fund is aimed at investors who need to maintain fixed income exposure, but want to diversify holdings as rates start to climb, in the UK, US and elsewhere.

Charles Stanley Increases Platform Fees

Online stockbroker Charles Stanley has hiked platform fees for the majority of ordinary investors. Those whose assets are less than £250,000 will see fees raised from 0.25% to 0.35% from September 10.

This price rise applies to those investing in shares, funds and investment trusts, as well as those holding ISAs and SIPPs.

Charles Stanley had offered one of the lowest platform fees, particularly to those with relatively modest assets.

The company says the increased charges were needed to maintain investment in the platform.

The stock broker confirmed that its minimum and maximum charges – of £24 and £240 respectively –will remain the same. Dealing charges remain at £11.50 per trade. Charges for those with assets over £250,000 have not changed.

Aberdeen Standard Launches Global AI Fund

Aberdeen Standard is the latest fund manager to capitalise on interest in new AI technology. But rather than investing in companies, and sectors, that are using this technology, this fund will utilise AI technology within its investment process.

This fund is being launched in conjunction with a Japanese research institute, MTEC. Standard Life Aberdeen’s chief executive Martin Gilbert says this fund complements the firms existing range of smart beta enhanced indexation funds.

Gilbert says: “For active investment management firms, the ability to use machines to read and understand vast amounts of data in order to forecast market moves more accurately has spawned innovation and a resurgence in active quantitative investment approaches.”

Neptune Manager Resigns

Neptune Investment Management has announced that its head of US equities is leaving the firm. Ali Unwin manages both the firm’s US Opportunities and Global Technology funds.

Unwin took over the management of the US Opportunities fund in July last year, following the departure of Robin Milway.

Neptune confirmed that George Boyd-Bowman, currently manager of the group’s US Income fund, will take over the running of the US Opportunities fund, assisted by Storm Uru and Neptune founder Robin Geffen. This fund has underperformed its benchmark in recent years and has just a two- star rating from Morningstar.

Geffen will also take over the management of the Global Technology fund, assisted by Ewan Thompson, Chris Taylor and George Boyd-Bowman.

Baillie Gifford to Lose Smaller Companies Manager

Andrew Strathdee, who currently runs the British Smaller Companies fund, is to step down next summer, after 24 years with the company.

Baillie Gifford says that it will announce a replacement for Strathdee in due course. The fund has lagged its benchmark over the past three years, according to Morningstar data - and has just a two-star rating.

Strathdee is the latest longstanding Baillie Gifford manager to depart the company. Earlier this year Sarah Whitley, head of the Japanese equity team, announced her retirement – alongside Stephen Rodger and Ken Barker, both partners in the firm’s fixed income area.

Andrei Kiselev also left the firm in May shortly after the launch of the US Growth trust (USA), on which he was deputy manager.

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Emma Simon

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