By Jane Wallace Rothschild Asset Management (RAM) is to roll out a technology fund of funds on 10 Ap...
By Jane Wallace
Rothschild Asset Management (RAM) is to roll out a technology fund of funds on 10 April.
Five Arrows Independent Technology Plus+ will be jointly managed by Robert Burdett and Gary Potter. It will invest in a range of both onshore and FSA-recognised offshore technology-biased funds, of which Rothschild has identified a universe of 115 portfolios.
Burdett said: "In stockpicking, we will be focusing on both the consistency of returns, as well as the investment management and process of the fund.
By achieving a balance between styles, we aim to mitigate the volatility that some of these funds experience individually, and in doing so make technology investments more accessible to investors who otherwise may have been put off the sector.
"We have to be very careful how we blend the different styles, as all the managers have a different approach to their investment scope and diversification. We have modified our existing process accordingly."
Rothschilds has decided to put out a fund of funds rather than a pure technology portfolio to achieve differentiation in the market.
David Orr, head of retail marketing at RAM, said: "It provides a solution for investors confused by the huge amount of choice and plays to our own strengths in independently managed portfolios."
Examples of the type of funds the portfolio will hold include long-established fund managers such as those running Henderson Global Technology, Aberdeen Technology and SocGen Technology, as well as newer and regional funds like Fleming Flagship EuroTech.
Burdett noted that he may eventually consider pure regional funds which are heavily overweight technology but at least 80% of such a fund's NAV would have to be invested in tech stocks. Burdett and Potter will be assisted by researcher Kelly Prior as well as Rothschild's technology team, headed by Chris Jenkins, which has been running technology funds for existing clients.
Commission for IFAs is 3% initial and 0.5% trail on the Isa version of the fund, or 5% initial and 0.5% renewal on the Oeic version.
Charges on the Isa are 3% initial and a 1.5% annual management fee, while on the Oeic version the initial charge is 5% and the annual is 1.5%.
Potter and Burdett will closely monitor the portfolio's exposure to major sectors and themes, such as IT hardware, software, media and telecoms, rather than comparing it against an index.
For this reason, it will be important for RAM to check that fund managers' investment processes incorporate some kind of global comparison.
For instance Spanish internet service provider Terra Networks is valued at $25,000 per subscriber where as the US's AOL is valued at $5,000 per subscriber, while Freeserve in the UK is $3,700.
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