Track record, investment process and resources will be key selection criteria for funds in the Five ...
Track record, investment process and resources will be key selection criteria for funds in the Five Arrows Independent Technology Plus+ fund which launches on 10 April.
As exclusively revealed in Investment Week, the forthcoming fund of funds will buy into vehicles with a technology bias, including areas such as biotechnology and telecoms.
The selection process first identifies a universe of over 100 technology funds both onshore and offshore. This is narrowed down to an investible universe of 45 funds, from which the 15 to 20 portfolio holdings will be chosen.
Gary Potter, assistant director for multi-manager investments at Rothschild Asset Management, said: "We will examine the returns and how and when they were achieved, which is difficult for some funds as an adequate track record does not exist.
"This therefore requires a qualitative approach first and then a quantitative one, rather than the other way around.
"We are looking to distinguish opportunistic returns from a long-term ability to produce consistent returns. In this way, when the technology sector does not perform well for a period, our selection will generate relative outperformance and we are not just picking up fads."
The portfolio will be up to 60% invested in core global technology funds, where the manager has a long-term and proven record.
Funds in this category include Henderson Global Technology, Aberdeen Technology, Scottish Equitable Technology and SocGen Technology.
The remainder of the portfolio will comprise smaller holdings in less well established funds from companies which nevertheless have significant technology experience. They include the following: Fidelity Technology, M&G Technology, Rathbone Technology, Investec Guinness Flight Technology, Finsbury Technology and Jupiter Global Technology.
Up to 20% of the fund is to be invested in regional funds to take advantage of opportunities in specific regions or countries such as Asia.
Examples of likely holdings are in funds such as Close FTSE Techmark, Gartmore UK Techtornado, Fleming Flagship European Technology, Royal & SunAlliance European Technology and Aberdeen European Technology.
Finally, up to 20% will be invested in specialist funds, such as Framlington Health, City Financial Biotechnology, Framlington NetNet and Fidelity Telecommunications.
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