By Robert Stock SG Asset Management is to launch a fund of funds with a global equities mandate inv...
By Robert Stock
SG Asset Management is to launch a fund of funds with a global equities mandate investing in its existing in-house retail and institutional portfolios.
The SocGen Stock Market Managed Fund is being launched at the end of the month in response to a call from NPI for a global managed fund to offer as a fund link to its customers.
It is designed to hold around 90% in global equities as well as having a small cash and bonds content.
It is to be managed by John Richards, who joined SG from Mercury, now Merrill Lynch Investment Managers. Richards also manages the group's global balanced fund of funds which has a significant fixed interest component.
The new fund will have SGAM's usual 5.25% initial charge and 1.5% annual management fee. Commission payable to intermediaries is up to 3% initial with renewal of 0.5%.
There is a minimum investment of £1,000 or £50 a month through the SG regular savings programme. The fund will take the number of retail portfolios offered through intermediaries from six to seven alongside the Technology, UK Income, UK Growth, Japan Growth, European Growth and Global Managed unit trusts.
Mik Bates, director at SGAM, said the launch of the fund mirrored the launch of the Global Managed unit trust, which was set up in response to a call from Scottish Equitable for an external fund link.
Bates added that asset allocation decisions for the fund would, such as Global Managed, be made at the monthly SG asset allocation meeting, as is the case with Global Managed.
Richards said: "Our asset allocation team, which is made up by all the heads of each of the major regions as well as the bond team, identifies both the short- and long-term drivers of the market. It is something that we are already doing for many of our institutional clients.
"We don't make a whole range of stock forecasts but try to identify the really important themes like interest rates, trends in growth rates and so forth."
The intention is to run the portfolio on a flexible basis. As well as regional equity asset allocation decisions, the asset allocation committee is able to tap into bond performance when equity markets are struggling. At launch on 1 November the fund of funds will be overweight in UK and Europe and underweight in the US and Japan.
Richards said: "It is an equity fund for people who want to invest long term and want a balance between UK and international equities. We will use our asset allocation expertise to provide this equities exposure but adjust the portfolio to try to avoid the obvious problems within the different regions."
Targeting intermediary market
Represents £8trn in assets
Simplify and modernise
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