By Kira Nickerson Scottish Value Management is actively promoting its New Economy fund to IFAs, foll...
By Kira Nickerson
Scottish Value Management is actively promoting its New Economy fund to IFAs, following its soft launch earlier this year.
The fund is part of Scottish Value Management's Dublin-based umbrella Portfolio fund and features an initial charge of 5%, 3% of which is payable as commission. There is an annual management charge of 1.25% pa, of which 0.5% is trail.
The fund, which invests in companies in the technology, communications and media sectors, was launched in March during the correction on the Nasdaq.
The New Economy fund, which focuses on the small to mid-cap range in the UK and European markets, looks for companies that have niche products providing strong top-line growth.
Consequently it has weightings not only in straightforward technology companies but biotechnology, telecoms, and logistics and distribution businesses that can benefit from new retailing.
The fund, run by Margaret Lawson, does not invest in fixed-line telecom operators such as BT or Deutsche Telecom, or consumer-facing internet businesses.
Lawson said: "We launched the New Economy fund as we felt there was an appetite among IFAs and investors in general for this theme.
"We look for areas of convergence between technologies and emerging new spaces or niches. We look to identify traditional businesses likely to make the successful transition to new technologies with an emphasis on commercialisation and revenue-driven business models. We also look at the management of these companies, how they will deliver their products and when."
The largest investment in the portfolio, which aims to hold between 35 and 40 stocks, is Knowledge Support Systems, which has developed a range of intelligent technical decision support systems software.
This allows commercial firms, such as oil companies, food retailers and mobile phones operators to change their pricing throughout the day, reflecting local competition and promotional offers. Another holding Lawson favours is Medisys, which is developing a retractable safety syringe with needles that snap back into plastic cases to avoid accidental jabs.
The fund is 85% invested in the UK, but this is likely to change as the fund matures, Lawson said. There are no US holdings although the investment team looks at the trends developing in the US when making decisions.
She added: "The fund has recovered quite strongly since its launch in March and nothing we held has gone down hugely. One holding has even doubled since March, Intec Telecoms, a specialist niche player in the telecoms billing area."
Other themes in the fund include IT hardware such as server switches, internet infrastructure, chip design and telecoms equipment. Growing specialist business services such as data exchange, disaster recovery and business continuity support.
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