more luxembourg-based sicav funds will now be made available to those European and UK brokers with offshore clients
The merger of three of the four Merrill Lynch Luxembourg-based Sicav fund ranges has opened a number of previously un-marketed funds to UK and European brokers doing offshore business.
Among these are three of the six US equity sub-funds of the Merrill Lynch International Investment Funds (MLIIF) US Basic Value, US Focused Value and US Small Cap Value funds, all of which are Standard & Poor's rated.
The 61-fund, $14.5bn range, which is available in 27 countries, has been created from the mergers of the Mercury Selected Trust, the Merrill Lynch Equity/Convertible Series and the Merrill Lynch Global Currency Bond Series.
According to the group, MLIIF is the largest Luxembourg-based Sicav in terms of sheer number of subfunds.
Michael Jones, MLIM's head of UK retail, said the move was significant as the funds in the old Equity/Convertible and Global Currency Bond ranges had not been as readily available to investors in the UK and Europe.
Jones said the three US value funds, which are managed by Bob Martorelli, Kevin Rendino and Elsia Baum, all based in the US, are among the range's most attractive sells and all come from the old Equity/Convertible range.
Baum's US Small Cap Value fund holds 100 to 150 shares and invests in companies with market capitalisations not in excess of the 24-month rolling average of the highest capitalisation in the Russell 2000 index.
Rendino's US Basic Value fund invests in between 70 and 80 stocks with a market capitalisation of over $5bn and, like the US Small Cap Value fund, is driven by qualititive, bottom-up research.
Martorelli's US fund holds a more focused number of stocks, ranging between typically 35 and 50 holdings. His investment universe includes all US stocks over $500m in size and again is driven entirely by qualititive, bottom-up research.
The range, which took two years to merge, contains 36 equity funds including 10 sector funds, six North American funds, seven global equity products and five Asia Pacific funds.
In all, 25 of the funds on the platform are rated by Standard & Poor's with the three US funds all carrying ratings of either A or AA. There is only one S&P AAA-rated fund on the platform, the World Gold Fund, which has seen strong performance while equity markets have struggled.
There are 22 equity funds with ratings between A and AA, and two bond funds, the US Government Mortgage and European Bond funds.
The merger, completed on 1 July, involved the closure of 10 funds, including a number of more obscure single market or single sector funds and those where there were two funds with overlapping investment mandates. Those to be merged include the MST Australian & New Zealand, MST Latin American, MST Pacific, World Financials, World technology and Emerging Markets TeleTech funds.
The other Mercury offshore fund range, the well-known MOST or Mercury Offshore Sterling Trust, has not been affected by the merger. It has been renamed the Merrill Lynch Offshore Sterling Trust, or MLOST. It remains a UK specific range as it possesses distributor status and will not be marketed in Europe.
Jones said a marketing drive to introduce the full range to clients would take place from September after the summer lull in broker activity. Details of the marketing drive are yet to be announced.
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