Barclays Global Investors (BGI) is to roll 13 unit trusts into an Oeic during the third quarter and ...
Barclays Global Investors (BGI) is to roll 13 unit trusts into an Oeic during the third quarter and use this platform to market more aggressively to IFAs, writes Robert Stock..
The move, which involves some £2bn in assets, will see the group introduce a number of institutional and retail share classes for investors.
The funds, which are managed using BGI's quant investment method, consist of 11 BGI branded funds already sold via intermediaries and two other unit trusts, branded Barclays until this month, which have previously not been distributed through IFAs. These are the European and American Growth funds, now being badged BGI.
The group's "scientific quant" method involves monitoring thousands of analysts' forecasts for stocks to gauge price momentum. The method, which relies on BGI's computing power, tracks analysts forecasts which on aggregate broadly indicate the direction of price momentum on individual equities. The more influential the analysts the more weight their opinion is given. As a result all the funds have a large number of holdings, often more than 200, and spread risk through taking small underweight or overweight positions.
John Demaine, managing director of BGI's product division said: "We have a range of BGI-branded mutual funds and the responsibility and control of those will be maintained by BGI and we will be maintaining that range of products over the course of the next 12 months.
"There will be a change in the way we distribute those funds and will be aggressively marketing those to intermediaries, which is the area in which we see ourselves operating in."
An application to launch the Oeic has not yet been posted with the FSA, however BGI will be writing to around 600,000 investors in the coming months and, where applicable their IFAs, to ask permission to go ahead with the move. The group hopes to have the conversion completed by October.
BGI said the details of the new share classes and charges will not be finalised for the next few weeks but it is expected the Oeic will contain between four and five share classes. The group believes this will result in reduced charges to many investors.
The share classes will seek to offer investors and intermediaries flexibility by offering tiered charges depending on how much they invest. The share classes are unlikely, according to Demaine, to include a zero initial charge share with a falling scale of exit penalty similar to the Henderson Global Investors X-share launched last year.
The funds to be rolled into the Oeic, which are marketed through IFAs, are the Distribution, Equity Income, European Growth, Far Eastern Growth, Gilt & Fixed Income, Growth & Income, Multi National, International Fixed Interest, Optimum Income, UK Smaller Companies, and UK Growth unit trusts.
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