By Robert Stock Aberdeen is set to launch a European counterpart to its Global Champions Fund and ...
By Robert Stock
Aberdeen is set to launch a European counterpart to its Global Champions Fund and could, in time, expand the range to include UK and US portfolios.
Subject to regulatory approval, the Aberdeen European Champions fund, which will be a focused portfolio of the group's best European ideas, is timetabled to launch by 19 March.
The move is seen by Aberdeen as the second step in developing a range of more aggressive satellite funds to sit alongside its core offerings. The fund will have a charging structure to mirror the Global Champions fund, with a 4.25% front end charge, 1.5% annual management fee, 3% IFA commission and 0.5% renewal.
There will be a discount at launch of 0.5% on unit trust business. Isa investors will receive the 1% discount available on all Aberdeen funds. There will be a fixed offer period until 5 April, when the fund will go live.
The proposed European Champions fund will be managed within the existing European team, with fund manager Stephanie Gerrard, who has worked on the Aberdeen European desk for three and a half years, taking responsibility for portfolio construction.
The head of the European team, Adrian Fowler, will take an active role in the stock selection for the fund, with Gerrard constructing the portfolio from a buy list based on the work of Aberdeen's European fund managers.
The portfolio will have around 50 holdings, compared with Aberdeen European Growth's 100-plus positions, and will be made up mainly of either dominant blue chip stocks with strong potential going forwards or mid-cap stocks which Aberdeen's European team sees as the champions of the future.
Fund manager Gerrard said the fund will be organised around three core themes overlaying fundamental stock-picking within a macro-economic context; globalisation, communications and the harmonisation of European business.
The theme of harmonisation includes merger and acquisition and consolidation in industries to produce cross-border companies. The portfolio will have a heavy focus on European companies that either compete or are poised to compete on a global stage. This includes the Spanish-led European position as the largest foreign investor in Latin America.
Gerrard, who specialises in consumer goods and services and media, said that the fund would be broad-based and should not be seen as a TMT offering.
She said that Aberdeen was finding its best ideas not in technology, where the US still leads the world, but in consumer cyclicals, financials benefiting from consolidation and the rise of the European equity culture, consumer staples, advertising, and even some auto names like BMW. Many of these ideas are informed by the Aberdeen view that the US is set for a soft landing.
Gary Marshall, Aberdeen's sales and marketing director, said: "This is part of a wider plan.
We see an increasing demand for more aggressive funds alongside the more traditional mainstream vehicles. The funds that capture investors' attention tend to be much more focused portfolios with 40 to 50 stocks: a higher risk, higher reward approach. We launched the global one first because that has got the widest appeal, but we can see a range of these funds rolling out in the future."
The markets to follow will be the US and UK.
By the nature of the funds, investing in global companies with the potential to become market leaders, champions funds focused on emerging markets and Far East, are, he admitted, less likely.
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