Io Investors has launched a Dublin-based sterling fund of funds with targeted returns of 5% above th...
Io Investors has launched a Dublin-based sterling fund of funds with targeted returns of 5% above the UK rate of inflation.
The fund, to be managed by Io subsidiary Psolve, will have no asset allocation restraints but, given its benchmark, will usually hold at least 5% in inflation-linked gilt funds with the rest divided between equity and other bond vehicles.
Principal of PSolve and lead manager on the fund, Mike Faulkner, said: "Historically, traditional equity and bond benchmarks have been used to measure success, but these bear no direct relation to the objectives of an individual who is aiming to conserve and create wealth in a stable way.
"To grow wealth, it is necessary to generate a return that consistently outpaces inflation, which is what erodes purchasing power over time, so we have constructed this portfolio with RPI as the base benchmark."
Co-manager Carol Allison said the group is presently using the retail price index, which excludes mortgage payments, as its inflation measure as it is the most widely recognised and quoted indicator, but would be happy to move to another measure should that be what investors want.
The fund is currently investing in absolute return-oriented equity strategies as well as more traditional income and growth equity portfolios. It also has an allocation to various specialist bond mandates, including global corporate credit and higher-yielding bonds. Underlying funds will typically have an approach of maintaining capital, with PSolve looking to groups such as Thames River on the fixed interest side, for example, as a number of its funds have capital preservation as a key consideration.
Overall, the team"s database covers more than 10,000 funds in various domiciles. These are first filtered down to 300 and finally around 60 key managers.
The initial charge on the product is 5%, of which advisers can discount up to 3%. In the launch period to 28 February, this initial charge will be discounted by 1% and the launch price will be 100p. The annual management charge on the retail share class is 1.5% and minimum investment is £1,000.
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