Close discretionary strategies funds offer wide diversification
Close Private Bank will roll out a new multi-manager fund to the whole of the market later this month.
Rex Cowley, director of products and services at Close, said the funds, which will be marketed as Close Discretionary Strategies, were launched internally on the back of its more conservatively-managed portfolio, the All Weather fund.
Cowley said: "The six funds we have introduced onto our fund platform are multi-asset, multi-style and multi-manager based funds.
"The All Weather fund is a neutral asset allocation model, whereas these funds are slightly different because they are looking for longer-term capital return but with diversification and access to some of the best expertise around.
"We launched internally to our existing clients and most of the interest has come from clients who have typically had discretionary investment strategies.
"However, with the changes in tax treatment and regimes around the world, the old style investment portfolio is becoming a lot less attractive.
"This is because single premium bonds and pensions are forming a much greater part of wealth management and it is a lot easier for someone to put a collective vehicle, like a unit trust into one of those structures rather than a discretionary portfolio.
"A multi-asset vehicle presents investors with excellent diversification, with the choice of property bonds, hedge component commodities and equities all in one fund.
"The multi-manager process works well because we identify individuals who have the appropriate skills to manage the different components."
Cowley said there would be a progressive class available, which offered more balanced investment options compared to the dynamic class, also available, which typically was a higher risk strategy.
All funds will be available in dollar, sterling and euro share classes, with the strategies underlying each currency different.
Cowley explained: "If there is a dollar investor, a larger percentage of the portfolio will be exposed to US dollar assets.
"For example, the fixed income element will be dollars, the property element will be dollars or hedged back into dollars, the alternative structure will be dollars and the equities will be spread but with a predominant weighting on US dollar securities.
"The actual selection of managers will be made by Close, and around 17 and 20 funds will be held. If there are too many funds it becomes too diversified and could impact on potential returns, given the potential for overlap. We really try to finely balance the underline investment style to complement each other."
The annual management fee is 1.6% and there are no redemption charges. A commission of 4.5% will also be available.
Introduced six new funds onto fund platform
Marketed as Close Discretionary Strategies
Funds available in dollar, sterling and euro
Annual management fee 1.6%
HL and Liberty SIPP slowest
Lifetime and annual allowances
'IFAs bore the brunt'
'Recovery or boom'