By Robert Stock Old Mutual Fund Managers is to launch an actively managed UK smaller companies fund ...
By Robert Stock
Old Mutual Fund Managers is to launch an actively managed UK smaller companies fund to be run by Ashton Bradbury, one of the team of lead fund managers secured from Hill Samuel.
Old Mutual Fund Managers will formerly announce the planned launch this week, although it is a move that has been expected ever since Bradbury, whose previous track record with Hill Samuel and HSBC made him a star name, joined the group.
Bradbury, who launched the HSBC UK Smaller Companies Fund in 1996, said at least 80% of the portfolio would invest in companies with market caps of around £800m. This corresponds to the expected cut off capitalisation for the Hoare Govett Small Companies Index at the end of the current calendar year.
He said it would be a focused portfolio of around 50 to 60 stocks and he was actively recruiting for an assistant fund manager to work with him.
The launch of the fund, which is subject to regulatory approval, will be on 29 January 2001. It will have an initial charge of 4% and an annual management fee of 1.5%. Commission will be 3% and 0.5% trail on all types of investment.
The minimum lump sum investment is to be £1,000 but it will be available through a monthly savings plan starting at £50 a month.
Bradbury described his investment style as flexible because neither growth nor value work in all market conditions. He stressed he was a stock picker, whose stock selection was overlaid with a view on the prevailing macro-economic conditions.
He said: "I have always believed that to be successful over the long term I have to be flexible about my approach. No one style is suitable for all seasons. The key to the way I invest is that I am prepared to accommodate a range of styles in my process and don't believe that value or growth are mutually exclusive."
In addition to focusing on management and fundamentals, Bradbury said value could be added by identifying other factors driving a share price.
While Bradbury will run his winning stocks, regardless of what size they achieve, he will adhere strictly to the rules that 80% of the portfolio must be in stocks under the Hoare Govett Small Companies Index capitalisation level. Individual stock positions will never be allowed to exceed 5%, but similarly Bradbury does not favour positions of under 1%.
He said: "This will be a relatively focused portfolio of my best ideas. Typically we will try to run stock positions of 1-3%. The larger unit sizes are companies with good transparency where I can see clear profit growth for years to come.
"These are companies in which I would be astounded to get earnings disappointments. In order to make sure that the fund has a chance of performing strongly, I need to add in a little more.
"That is where the smaller unit sizes come in."
More than half of people over the age of 55 see financial security as a top priority in retirement, yet a third allocate more time to buying a new car, research from Legal & General (L&G) has found.
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Alongside Barrett, Hopkins, Boston and Thorman on 17 October