New Star is test marketing a cautious, high income fund of funds product that would be managed by Mark Harris and Craig Heron.
The fund, to be called the New Star Cautious Portfolio, would also aim to deliver some capital growth.
Still subject to regulatory approval, it would be launched as a sub-fund of the group's Oeic and would make use of Coll regulations, enabling the managers to use derivatives. The fund would not offer capital protection.
Rob Page, marketing director at New Star, said feedback from the group's fund of funds roadshow indicated intermediaries are keen to see an income producing fund of funds and subsequent test marketing had also proved positive.
"New Star has seven funds of funds, four of which are multi-asset portfolios and three single country products. The multi-asset funds are various growth products, with different risk budgets so it seems there is a need for an income producing product," he said.
If the decision is made to go ahead, the fund would be launched in the fourth quarter of 2005, pay out income four times a year and benchmarked against the IMA Cautious Managed sector.
It would contain a minimum 40% fixed interest and cash.
The fund would pay commission to advisers and a standard fee charging structure would apply. It is unlikely to carry a performance fee.
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