Premier funds service to use five strategies to invest in nine multi-manager portfolios
ABN Amro is to launch its retail fund of funds service next month with five investment strategies investing in nine underlying multi-manager portfolios.
The group's plans follow the acquisition of Singer & Friedlander's £105m Premier Funds Service along with its investment team, as exclusively revealed in Investment Week in December.
ABN Amro will convert the current Singers offering, which is a discretionary portfolio service, into an umbrella fund of funds, called the ABN Amro Premier Funds Service.
The five strategies the service will employ are balanced, capital growth, conservative, international and ethical.
The balanced strategy will concentrate on capital growth with a conservative risk profile and will provide some income, while the capital growth strategy will provide growth from a global perspective but tailored to a UK audience.
The conservative strategy will look at total return in a risk controlled manner, it will have exposure to equities and a strong element in bonds. The international strategy will provide exposure to the world (including the UK) but it will be used as an opportunity to diversify away from domestic assets. The ethical approach is a capital growth strategy using socially responsible investing (SRI).
Nick Wells, product and communications director at ABN Amro, said that each strategy can be bought as a general investment, a Pep transfer or an Isa.
The underlying funds that ABN Amro is launching for the service will include UK Growth, UK Equity Income, International Growth, Ethical and Fixed Interest offerings.
In addition to this, there are three funds within the Premier Funds umbrella dedicated to Pep and Isa investment ' the ABN Portfolio Growth, Balanced and Conservative funds. Outside the umbrella there will also be a cash fund.
Wells said: 'There will probably be seven to 11 holdings in each fund. Typically in other fund of funds the holdings range between 10 and 15, so it will be more concentrated than others. International Growth will be quite an aggressive fund, and this portfolio is our mechanism for changing international weightings. To get US exposure you only really need one or two US funds, a US fund of funds requires five to six underlying portfolios in it, so we decided against launching country-specific offerings.
'This we think will give us an edge in providing diversification. It means there is no requirement to buy lots of funds, we can actually buy the ones we like.'
The new service will have critical mass immediately because the current underlying funds in the Singers service will be transferred to ABN Amro via an in-specie transfer, and these will populate the service.
The fund of funds will be run by Aidan Kearney, who will move over with the assets from Singers with his team of five colleagues.
The service will be sold directly to intermediaries, rather than to consumers. There is a 4% initial charge and a 1.25% annual management fee for each fund. Intermediaries are offered 3% commission, with 0.55% trail.
Minimum investment is £10,000.
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