Lincoln Financial Group's Internet Tollkeeper fund has launched amid the volatility on Nasdaq, and h...
Lincoln Financial Group's Internet Tollkeeper fund has launched amid the volatility on Nasdaq, and has fallen 17.39% between 3 April and 17 April.
Tollkeeper is ranked 31 out of 40 in the Global Specialist sector over that period, with the average fall in the sector amounting to -12.55%.
Lincoln has teamed up with Goldman Sachs Asset Management to launch the trust. The trust is designed to give investors a taste of internet growth stocks.
The portfolio aims to benefit investors from increasing activity on the internet and derives its name from its description of the kind of companies in a key position to raise the toll (prices) or increase the traffic (users) at the internet gateway.
Lincoln claims it is designed for investors who want internet exposure but are worried about the high valuations of relatively unestablished firms like Freeserve.
Vince Rennie, head of investment at Lincoln, admitted the fund was not for the novice.
He added: "Some of today's hot internet companies may not have sustainable growth, long-term profitability or certain futures. The Tollkeeper Trust takes a more conservative approach."
Reflecting the current trend of investing in business to business stock, the fund aims to invest in the internet's more established growth businesses that provide the infrastructure and support needed to sustain the development of the internet over the longer term.
According to Lincoln, the companies share common attributes such as recurring revenue streams, good track records, dominant market share, strong brand names, and pricing power.
Rennie said: "It is these structural, competitive and strategic advantages that should drive sustainable earnings through the long-term."
Examples include companies such as Sun Systems, which provides computer servers, the hardware needed to host an internet site, internet service providers like AOL, well placed media firms, and old economy companies that are applying a rapid internet strategy.
Rob Merrick, Lincoln's investment marketing manager, said the fund is based on Goldman Sachs' own Tollkeeper Fund. This funds was launched in the US on 1 October 1999 and is valued at more than $2bn in assets.
He added: "We are not looking to have dot.coms in our portfolio at all. We favour companies that will benefit from ongoing charges for services provided on the internet."
Merrick cites Verisign, which provides security on the internet, and credit card or telecom companies as preferred constituents in the fund as well as European mobile telecoms company Vodafone.
He said: "It is primarily a US fund but Goldman Sachs will be looking increasingly to Europe. While the US is seen to be two years ahead of Europe on the internet, Europe is a similar period ahead in terms of mobile phone technology."
The website, www.lincoln-tollkeeper.com, boasts a cartoon-style introduction and allows online application by either filling in on-screen or downloading an application form that can be printed out and filled in.
The fund is featuring a 2% discount on its 5.25% initial charge lump sum investments into the unit trust until the end of May.
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