ubs uk select, global optimal and managed to offer two week 1% discount from 28 june
UBS Investments is to launch three retail funds at the end of the month as its first offerings to the intermediary market.
The funds will have a 1% discount off the initial 4% during the two-week offer period, which starts on 28 June.
UBS UK Select, to be managed by Paul Fairbrother, is the group's replacement for its UK Growth fund, which had been scheduled for launch this month but was pulled after the fund manager, Hugh Sergeant, left the group to join SG Asset Management.
UBS Global Optimal, a diversified portfolio aiming to capitalise on stock opportunities at the sector level rather than on a geographical basis, is to be managed by Wilson Phillips.
The third retail fund is UBS Managed, to be run by David Maylett.
At launch, the UK Select portfolio, with 75 holdings, is to be run with a bias towards mid caps and will have an underweight position in banks, pharmaceuticals and oil and gas stocks. UBS expects its overweight positions to be in media, tobacco and telecom services sectors.
Fairbrother will depend on the group's 19 UK analysts for his stock recommendations but is limited to a portfolio exposure plus or minus 5% of the FTSE All-Share weighting of any individual stock and plus or minus 10% in any sector. Tracking error will vary but UBS wants to limit it to 6%, with the aim of the portfolio to provide top-quartile performance on a 12-month rolling basis. The fund will only differ slightly from the previously planned UK Growth portfolio, which Graham Kane, managing director at UBS Investments, said was more dependant on the ideas of the named fund manager.
The Global fund, benchmarked against the MSCI World Index, is to have overweight positions in healthcare and media stocks at launch and will be underweight autos and information technology. The fund aims to have a tracking error of 3%-5%.
Phillips is also held to the 5% stock and 10% sector level restrictions. He can leverage off the group's 86-strong worldwide analyst team for investment ideas. Analysts within the team rate individual stocks and sectors by looking at forecast earnings growth discounted to determine the expected returns level and whether the sector or company is over or undervalued.
The discounted cashflows used, which vary between sectors, will also vary depending on the certainty of the projected earnings from a company or sector. In a basic industry, there is more predictability of earnings in contrast to a company offering an untested new product, Kane said. Forecasts are done on a five to seven-year view.
UBS Managed, due for the balanced managed sector, aims to be top quartile on a three-year rolling basis and will have an equity weighting of 72% at launch. It is aimed at Sipp and Ssas investors. Fixed interest holdings will be predominantly government debt, although Maylett will have the ability to go into select, investment grade corporates, Kane said. At launch, 53% of the portfolio will be in domestic equities, an underweight position compared to the Lipper average, with 18.5% in overseas.
The fund will hold 8% in cash, 3% in property and the remainder in fixed interest.
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