Nearly three-and-a-half years after closing its UK Bear fund Govett has decided to relaunch the prod...
Nearly three-and-a-half years after closing its UK Bear fund Govett has decided to relaunch the product, designed to produce performance that is the mirror image of that achieved by the FTSE 100.
The portfolio will be managed by Conrad Preece, who runs the £40m US Bear fund and was also manager of the former UK Bear fund, which closed in October 1999 at £3.8m.
It will carry an initial charge of 3.5% and an annual fee of 1.5% and there is 3% initial and 0.5% renewal available.
The minimum investment is £3,000. It is an authorised futures and options fund and as such is not eligible for Peps or Isas. It will sit in the Index Bear sector alongside Govett's US Bear fund.
The product operates by buying and selling futures on the FTSE 100, essentially shorting the market when money is invested into the fund. Anyone shorting the market can in theory lose more than they invest, as a result the portfolio will have call options in place to protect against this.
The UK fund will invest in a very similar manner to the US Bear fund, which over three years to 26 May 2003 is up 24.0%, compared to the North America sector average, which over the same time fell 43.2%.
David Billyard, head of sales at Govett, said the launch of the fund is not any statement regarding the future prospects for the market but simply a matter of responding to client demand and is a logical extension to its existing fund range.
Simon Wilson, head of marketing, said for many investors the current market environment is their first experience of a bear market and he added it is very possible investors will remain interested in funds that can offer the potential to make positive returns in a falling market. The fact that the US Bear fund has grown to £40m demonstrates its appeal, Wilson said.
Darius McDermott, managing director of Chelsea Financial Services, said the fund is a valuable addition for those investors who have suffered in the bear market but added it would have been ideal to have access to it three years ago.
He said: 'Bear funds are obviously popular at selective times, so Govett has to be committed
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