F&C has launched the UK Opportunities fund, a focus fund investing in a concentrated portfolio of 'best ideas'. Managed by Phil Doel, the fund will hold 25 equally weighted stocks of 4%; it has no style or size bias and is unconstrained by its benchmark.
Doel said: "People expect market returns to be a lot lower today than they were in the 80s and 90s. As a result successful stock picking will be the major contributor to outperformance. In a lower return world you need more than just beta, you need strong alpha returns for beating the index and this fund does just that."
The fund targets outperformance of the FTSE All Share index and consistent top-quartile returns over a three-year period. Doel previously ran an equivalent fund to this at DWS prior to its sale in 2005. The DWS UK Opportunities had a top-quartile performance ranking of 19 out of 272 funds in the UK All Companies sector.
Doel says the fund will hold four types of stock; backbone stocks that are designed to be in the portfolio permanently, long-term investments which are expected to last two to three years, short-term investments of 12 to 18 months and also brief trading opportunities.
The fund will rebalance each time a stock moves away from its 4% weighting and will take the profits and sell at a 5% crash barrier. Doel will also be able add money to rebalance a stock if it falls to 3%, should he choose not to sell the stock. The fund has a 5% initial charge (4% until 7 April 2006) and a 1.5% annual management charge. It also 3% initial commission and a 0.5% annual commission.
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