By Jenne Mannion Deutsche Asset Management is to launch its New Economy Fund on 9 October, as the fi...
By Jenne Mannion
Deutsche Asset Management is to launch its New Economy Fund on 9 October, as the first sub fund of its Oeic.
The fund will be managed by Clare Flynn. Flynn, a member of the UK equities team at Deutsche, will be supported by a team of 30 analysts in five countries.
Neil Jones, acting managing director at Deutsche, said the fund will aim to be a low-risk portfolio containing safer technology companies.
He said: "Most of the companies to make it into the new economy fund would have qualified through our investment process. By definition these are what we believe to be higher quality companies.
"That includes companies that have visible earnings and profits already in place, robust business models and management that we believe to be of the very highest quality.
"It is not a catch-all technology fund, it is a higher quality international fund containing the best ideas that we have on successful companies in the new economy."
Jones said the fund is a natural progression from the investment process applied by Deutsche to the technology, media and telecom sector.
He said: "In this way it is a concentration of our best global new economy ideas in one portfolio."
In addition to benefiting from traditional technology companies, the fund aims to capitalise on the types of companies that use and exploit new technologies to better service customers and grow their businesses.
The portfolio will hold between 60 and 70 stocks, which will be Deutsche Asset Management's best global investment ideas. It will fall within the specialist sector.
Jones said the investment process will be based on fundamental research on companies, and this bottom up style will be checked against the house's model portfolio to minimise risk.
Examples of stocks to be held in the portfolio are Charles Schwab, the leading US online retail broker which has about $865bn in customer assets and almost seven million active accounts.
Charles Schwab adds about 400,0000 new customers per quarter. It has been gaining market share and has been able to boost margins and returns.
Another stock is GWR, owner and operator of Classic FM, the UK national commercial radio station. Because it is radio it is likely to remain a substantially cheaper medium than television for advertisers, Jones said.
As closely targeted audiences increase, companies like GWR should be in a position to increase their prices as well as improving their yields. GWR is also a unique play on the emergence of digital radio, he added.
The fund will be available as an Oeic fund or an Isa and the minimum initial investment is $1,000. The initial fee on the Oeic fund is 5.25% and on the Isa it is 3.25%. The annual management charge is 1.5%. The minimum investment is 1.5% and there is a monthly savings plan from £25 a month. IFAs are offered 3% initial commission plus 0.5% on Isas.
Jones said the launch of the fund was the first step into the Oeic structure, called Deutsche Select. Deutsche will convert its existing unit trust range into the Oeic structure next year.
What made financial headlines over the weekend?
Q2 net sales dropped almost 50%
‘Important to have an anchor’
Lack of innovation for solutions