By Kira Nickerson Gartmore is to launch its range of five best ideas funds on 31 January, investing...
By Kira Nickerson
Gartmore is to launch its range of five best ideas funds on 31 January, investing in the US, UK, Europe, Japan and globally.
The Gartmore US Focus fund will be run by Ashley Willing, Europe is to be managed by Ann Steele, Nick Reid is the lead manager on Focus Japan, Simon Melluish is to manage the American fund while Neil Rogan is to run the global portfolio.
These higher risk portfolios are concentrated versions of Gartmore's mainstream range and will typically hold 30 stocks each.
Michael Wrobel, head of UK retail at Gartmore, said there will be an element of short term ideas that will be held within the funds, something not typically done in more mainstream portfolios.
This would mean that up to half of the stocks within the focus funds will be selected on a six to 12 month view as opposed to the typical 18 month to two year view held in the mainstream portfolios.
The funds are to be benchmarked against mainstream indices and will feature a tracking error of less than 10%. They will also be listed in the mainstream Autif sectors, with, for example, the UK Focus fund in the All Companies sector.
The range is being marketed as Gartmore's best ideas and as higher risk investments, although there are several risk controls in place, at the stock, sector, market and portfolio levels. Gartmore's internal risk ranking system gives the funds a rating of four, with funds such as TechTornando ranked five and gilt and cash funds ranked as one.
Charges on each of the funds will be 5.25% and Gartmore is to offer a launch discount of 1.5% off the initial. This will be available until the 30 April. The group is also introducing renewal commission of 0.5% for IFAs for the funds.
The annual management charge on each of the five will be 1.5% for the first 12 months after the fund's launch after which it will vary as it incorporates a bonus for the manager if the portfolios outperformances its peers.
A year after launch the funds will be compared on a monthly basis against their individual peers.
If, for example, the American Focus Fund, is ranked in the first quartile over the month then investors will be charged one-twelfth of 2% for each month the fund retains that ranking.
If it falls below first quartile for any month then investors would be charged one-twelfth of 0.75% for each month it underperforms relative to its peers.
The introduction of renewal commission for IFAs on the product is part of the group's on-going review into its pricing structure on its fund range. Until the launch of these funds, renewal has only been made available on Gartmore TechTornado.
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