Fund Times: 28 June - 2 July

Artemis Capital manager change; Gartmore launches new hedge fund; Nationwide launches new structured product; F&C to launch new open-ended property fund; Henderson launches global currency fund; Morningstar qualitative ratings and reports issued this week.

Alexander Prineas 2 July, 2010 | 4:41PM
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Artemis Capital manager change
Jacob de Tusch-Lec will hand over management of the Artemis Capital fund to Philip Wolstencroft, in order to focus on the upcoming launch of an Artemis global equity income fund. Morningstar has changed our Superior rating to Under Review for Artemis Capital following the shift in responsibilities at the helm. While we are familiar with SmartGARP and Philip Wolstencroft’s use of this quant-based system through his tenure at Artemis European, we need to understand his intentions in this UK equity fund before re-issuing a rating. A report on Artemis Capital is here. The rating for Wolstencroft’s European fund remains Superior, and the report can be found here

Gartmore launches new hedge fund
Gartmore announced the launch this week of the Gartmore AlphaGen Pan-European Equity Hedge Fund. The fund will be managed by John Bennett who joined Gartmore from GAM in early 2010 (covered here), along with two GAM investment analysts. This is Bennett’s first hedge fund charge at Gartmore, but he already runs the more traditional Gartmore European Selected Opportunities and Gartmore SICAV Continental European funds. Bennett built up a strong track record on European long-only and hedge funds at GAM, however this represents a significant additional responsibility but as all three funds focus on Europe our concerns in this area are allayed. 

Nationwide launches new structured product
Nationwide has announced the launch of a new structured product which they have dubbed a Protected Equity Bond. While structured products can form a valid component of an investment portfolio, the sector faces challenges for retail investors. Structured Products are typically not transparent and often have unusual pay-off structures that can disguise high fees or the potential for mediocre returns. This product uses the term “equity” in its name, however we note that according to Nationwide’s press release, the maximum return on the product is a 6.00% AER over six years. The product thus appears to have a return profile somewhat akin to fixed income products. This is not a problem in itself, although we note that the minimum return is only 1.44% AER – a relatively low return. Investors considering these types of funds would do well to ensure they understand the product’s pay-off and fee structure and ensure that it’s appropriate for their needs. 

F&C to launch new open-ended property fund
F&C will soon launch the F&C UK Property Fund under the NURS structure (non-UCITS retail scheme). The fund will be run by existing F&C property managers Julian Smith and Guy Clover who bring considerable experience to the proposition, having been in property and investment management roles for an average of more than 25 years. However retail investors should be cautious with such a launch – we are generally cautious of any vehicle that offers daily liquidity, but invests into an illiquid asset. This is especially the case early in the life of such a product when the portfolio is likely to be concentrated in a small number of property holdings, and cash levels in the fund may be volatile depending on investor inflows and F&C's pipeline of property transactions. Investors considering this fund would want to be confident that the experience of the managers and the large property investment team backing them, is enough to overcome these hurdles.

Henderson launches global currency fund
Henderson Global Investors has launched the Henderson Horizon Global Currency fund to be managed by Bob Arends under a Lux-domiciled UCITS III structure. Performance depends largely on the skill of the manager in correctly picking currency movements. 

Morningstar qualitative ratings and reports issued this week
Morningstar issued new qualitative ratings and reports on a number of funds available to UK investors this week, including Morgan Stanley UK Equity Alpha and BGF World Energy. Click here to see the full list.

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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About Author

Alexander Prineas  is an associate director of manager research for Morningstar Australasia.

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