Old Mutual Asset Management (OMAM) is to launch an aggressively managed FTSE 100 portfolio, believi...
Old Mutual Asset Management (OMAM) is to launch an aggressively managed FTSE 100 portfolio, believing this is something the onshore retail market does not yet have.
Prompted by demand from the intermediary community, includ-ing groups such as Hargreaves Lansdown, the fund will aim to outperform the FTSE 100 through active stockpicking.
With around 40, and no fewer than 35, holdings, the fund is intended to be more concentrated than the blue chip portfolios currently on sale to intermediaries.
Richard Moore, who runs the group's £52m UK Growth fund and co-manages its recently launched UK Select Mid Cap fund with Ashton Bradbury, will aim not only to pick winners but avoid blue chips that surprise massively on the downside.
Blue chips have traditionally been seen as safe investments but the events surrounding Marconi, NTL and Railtrack have shown this is no longer the case, according to Barry Russell, head of marketing and client servicing at Old Mutual. Large devaluations in groups like Vodafone and Energis have further shown the damage stocks can do to a portfolio, he said.
The Old Mutual fund will have a minimum 80% in FTSE 100 stocks. Moore, who was recruited from Singer & Friedlander last year, will invest the rest in FTSE 250 stocks that are set to be promoted to the FTSE 100.
This facility is designed to allow him to avoid the index-tracking effect of having to wait for large FTSE 250 stocks to be included in the FTSE 100 before investing in them. By that time, OMAM believes, much growth has been missed. The group stressed this is not a backdoor way of gaining mid-cap exposure.
The fund's only apparent peer, Scottish Value Management's Active FTSE 100 fund, managed by Andrew Kelly, is to be moved onshore by the Edinburgh-based boutique but is not due to appear until later in the year.
Russell said the Old Mutual fund is aiming to outperform the FTSE 100 by a minimum of 1% after charges but, as an active manager, Moore is seeking higher returns.
Moore has considerable freedom of investment, with few holdings restrictions and no requirement to stay close to the index.
For the largest stocks, however, a 4% underweight is the maximum bet he can take.
Old Mutual is aiming to launch the fund around 22 April. Charges will be in line with the group's other portfolios, with an annual management fee of 1.5%, initial charge of 4%, 3% initial commission and 0.5% trail.
The fund is designed to add a clear, active UK large-cap element to a client's portfolio. Russell said many UK growth portfolios offer investors substantial mid and small-cap exposure, providing a higher risk profile than is apparent.
Contact: 0808 100 2715.
Scope for change post-Brexit
To tackle liquidity issues
More than £100m in pipeline
DB data published last week
'Heavily influenced by Morningstar'