Flemings trust offering

By James Thorneley

Flemings is to offer an investment trust of investment trusts from the start of next year.

The Fleming Managed Growth investment trust, managed by Simon O'Sullivan, will be available through four of the group's wrapper products.

The £27m trust was launched on 24 November and was initially for the group's managed pension portfolio holders. Investors were invited either to roll over into the trust or construct their own portfolio from shares in the group's 18 trusts. Around 90% of funds were rolled over into the trust.

The group is now looking to broaden the appeal of the portfolio. From 1 January investors will be able to hold the trust through the Fleming Isa, Share Plan, Pension Account or switch their Pep into it.

The underlying portfolio of the trust is split at 65% in UK trusts and 35% in international trusts. The five holdings it has in the UK part of the portfolio are Fleming Claverhouse, Fleming Smaller Companies, Fleming Mercantile, Fleming Income & Capital units and Fleming Geared Growth.

Within the international part of the portfolio there are six trusts - Fleming American, Fleming Overseas, Fleming Continental European, Fleming Japanese, Fleming European Fledgling and Fleming Asian.

At launch shares were issued at 273p since then the price has peaked at 301.5p on 16 December. On the same day the NAV per share was 295.7p meaning the trust was trading at premium to NAV of 2%. The trust has the power to issue more shares and will actively do so to meet demand. Flemings said it would need to issue more paper because current shareholders are long term investors as they hold the trust as part of their pension.

The minimum lump sum investment into the Isa is £1,000 and the minimum monthly contribution is £100. The purchase charge is 1% plus 0.5% stamp duty while the annual management charge is £25. Intermediaries can receive up to 3% initial commission on lump sums, deducted from the client's investment. Renewal is 0.5% which is paid from the trust's annual management charge.

The Share Plan has the same initial charge and commission as the Isa but has no annual charge. The minimum lump sum investment is £400 and the minimum monthly contribution is £40. The switching charge for Peps is being waived, it is normally 1.5%. The purchase and annual charges on the Pep product are the same as those on the Isa and Share Plan. Commission on all transfer business is 1%, paid from the purchase charge with 0.5% renewal paid from the trust's annual management charge.

Investors into the Pension Account only need to pay the 0.5% stamp duty for the purchase charge.

The annual charge begins at 0.5% for investments below £4,999, for those between £5,000 and £9,999 it is 0.4%. For investments between £10,000 and £70,000 the charge is 0.25% and for those above £70,000 it is £175. Up to 3% commission is available to IFAs paid from the client's investment and 0.5% renewal is paid.

Contact: 0800 181 925.

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