specially created UK growth and equity income funds will be launched on 17 June
UBS Global Asset Management is launching a UK Growth and an Equity Income fund on 17 June as its first retail offerings.
The growth product will be managed by Hugh Sergeant, head of UK equities at UBS, while the equity income portfolio is to be run by Hari Sandhu, head of the specialist UK equity desk.
This is UBS's first attempt to establish itself as a retail mutual fund provider in the UK, although it does have a considerable retail presence in Europe and the US, with some 183 fund offerings. Around half of the company's £285bn in assets under management is retail money.
UK Growth and UK Equity Income are both funds which have been created specifically for the retail market, rather than being clones of existing institutional mandates. They will be launched under UBS's UK Oeic which was set up earlier this year.
Graham Kane, managing director and head of retail at UBS Global Asset Management said: 'We are looking to build a range of around a dozen funds over a three year period, in mainstream product areas, in both equities and bonds. This should give us coverage of around 95% of the market. We have looked extensively at what's being bought and what's likely to be bought in the future.'
Kane said that the company would seek to leverage off its global presence which consists off some 485 analysts and fund managers. He added that the retail managers had been selected on the basis of their desire to run retail money and the strength of their track record. Both Sergeant and Sandhu, he said, had significantly outperformed their benchmarks in recent years on the institutional funds they ran.
Sub-funds launched under the UK Oeic will have two share classes.
The 'A' share class, which is for retail investors, carries a 4% initial fee and an annual charge of 1.5%. Intermediary commission is 3% and renewal of 0.5% is also available. The 'B' share, or institutional, class will not carry an initial charge and have an annual fee of 0.9%. Minimum investment is £100,000.
Both funds will be actively managed and run with portfolios of around 75 stocks. The UBS investment style is value orientated, although these funds will adopt a pragmatic approach to investing where market conditions dictate.
The company is aiming to establish itself as a serious player in the retail market, believing there are few companies with the global credibility and research capacity to match it, currently operating in the UK.
'We will be looking to launch other funds this year, with European and US equity funds being the most likely, although a decision has not yet been taken on which will be the first of these,' said Kane.
UBS's business plan will concentrate on business to business distribution, both through intermediaries and fund supermarket platforms. The company will also look to develop links with companies offering multi-manager solutions.
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