Fund Strategy articles from August 2006

Fund Strategy archives from August 2006

COMMENT: Case for healthcare is not demographic.
August 7, 2006... The healthcare sector provides an object lesson in how not to invest. As Paul Farrow points out in this week's cover story, there was a surge in healthcare stocks as part of the technology bubble of the late 1990s (see page 16). Then stock...

Isis presses for change to small-cap trust management.
August 7, 2006... The board of the #65.9m Isis Smaller Companies investment trust is seeking shareholder approval to switch the management of the trust from F&C to Montanaro Investment Managers. This follows a review of the trust's management after the...

Director quits Old Mutual to pursue new career.
August 7, 2006... Andrew Lightbown, managing director of retail at Old Mutual Asset Managers, has left the group. Lightbown, who worked at Omam since its foundation in 1999, is leaving the industry to pursue a career in teaching. Before joining Omam he...

IN BRIEF: Witan investment trust shares rise.(Brief article)
August 7, 2006... Witan investment trust's share price increased by 0.5% in the six months to June 30, according to its latest unaudited interim results. Over the past year it has risen by 14.6%, compared with 14% for its benchmark - half the FTSE World ex UK...

IN BRIEF: Resolution and Hexam open fund.(Brief article)
August 7, 2006... Resolution Asset Management and Hexam Capital Partners have launched the Resolution Hexam Eastern Europe, Middle East and Africa Absolute Return fund. It is the first fund to come out of the joint venture between Resolution and Hexam. The...

IN BRIEF: Hedge funds show low returns in July.(Brief article)
August 7, 2006... Hedge funds significantly underperformed global equity markets in July, according to MSCI Barra. The MSCI Hedge Invest Fixed Income index was the best strategy level performer with an increase of 1.02%. The worst performer was the MSCI Hedge...

IN BRIEF: Fidelity hires chief for multi-manager.(Brief article)
August 7, 2006... Fidelity has appointed Phil Morse as business development director of its multi-manager team. He was previously a multi-manager product specialist at Gartmore and before that spent seven years at Skandia. He also worked at Allied Dunbar and...

JPM adds income shares to Euro trust.
August 7, 2006... JPMorgan has issued an income share class of its Continental European Investment trust. The move is the result of one of six resolutions passed by shareholders in an extraordinary general meeting last week. The new income share class...

Investment inflows at their highest since 2000.
August 7, 2006... This year is on track to see the biggest net investment inflows since 2000, according to the Investment Management Association. Its latest monthly statistics show that individual investors put #8.2bn into funds in the first half of 2006,...

Shareholders poised to vote on new name and aims for Aberdeen fund.
August 7, 2006... The name and objective of the Aberdeen Balanced Managed fund is set to change under new proposals released last week. The changes, which are subject to shareholder approval, will allow the fund to adopt wider powers under Ucits III. ...

IN BRIEF: Abbey increases choice of funds.(Brief article)
August 7, 2006... Investors now have access to 1,000 funds through Abbey Wrap, it was announced last week. Abbey has added 150 funds and five new management groups to the platform since the start of the year. The additions include 40 funds from Scottish Widows...

IN BRIEF: Jupiter offers boost to IFAs.(Brief article)
August 7, 2006... Jupiter is offering IFAs enhanced commission on 12 of its most popular funds. Advisers can earn up to 4.25% on all lump sum investments and transfers into a selection of Jupiter's income, growth and fund of funds options. Advisers can either...

IN BRIEF: Lincoln Japan delivers as quant.(Brief article)
August 7, 2006... The Lincoln Japan Trust, managed by Goldman Sachs Asset Management, has outperformed the average fund in its sector one year after switching to quant. Over the 12 months to June 12 the fund returned 23.43%, compared with 22.29% for the IMA...

Japan key to global liquidity squeeze.
August 7, 2006... The Japanese recovery is a key factor in the drying up of global liquidity in recent months, according to a report by Lombard Street Research.* Charles Dumas, a director of Lombard, says that Japan's economic recovery is creating a...

Fund managers caught out by market volatility.
August 7, 2006... Be careful what you ask for, says Standard & Poor's in its latest review of the global equities sector. According to the report, fund managers were unhappy with the lack of volatility in the markets over the 12 months to April 2006. But,...

Global interest rate rises point to further liquidity tightening.
August 7, 2006... Global liquidity tightened by another ratchet last week, with several countries raising rates and others hinting at tighter liquidity. Britain, the eurozone and Australia all increased rates by a quarter point. The Bank of England's move...

Focus turns to Fed as signs of US slowdown escalate.
August 7, 2006... It has been widely predicted that American economic growth will slow this year. Second-quarter figures suggest the slowdown has already begun. Real gross domestic product grew by only 2.5% in the second quarter, compared with 5.6% in the...

TRENDS: Property is a useful diversification tool.
August 7, 2006... The implementation of Ucits III and the introduction of non-Ucits retail schemes has increased the scope for investors to put their money into property - and many are reaping the benefits. Until recently property investment was the domain...

STRATEGY: World equity prices remain fair value.
August 7, 2006... Global corporate earnings have more than doubled over the past four years, benefiting from expanding activity and low interest rates. In contrast to the bull market of 1998-2000, which was built on the apparent prospects of non-earning "concept...

Q&A: Rate rise fears prevent bond outperformance.(Interview)
August 7, 2006... Stephen Snowden, manager of the Old Mutual Corporate Bond fund, is questioned by Adam Lewis. Q: It has been reported that the falls in global equity markets are affecting Europe's corporate bond market. Traditional thinking assumes that...

FEATURE: Recovery position.
August 7, 2006... The healthcare sector took a severe knock when the tech bubble burst, and has struggled to perform ever since. But with US economic growth expected to slow, the sector is once more attracting investors. Paul Farrow reports. Six years...

Healthcare fund recommendations.
August 7, 2006... There are just a smattering of unit trusts, Oeics and investment trusts specialising in healthcare. Here are some recommendations from the experts. Mick Gilligan, director of fund research, Killik & Co: "The Finsbury Worldwide...

Healthcare fund recommendations.
August 7, 2006... Robert Harley, researcher at Bestinvest: "The biotech sector is set to benefit from ongoing acquisition activity as large pharma companies use cash balances to buy smaller biotech companies, and in doing so boost their drug pipelines. From a...

REVIEW: Safe approach favours the investor.
August 7, 2006... A welter of historical data and advice on favouring a measured response to the vagaries of the markets aims to arm novices and informed investors with a logical and rewarding method. Investors should obsessively seek to minimise costs and...

ANALYSIS: Indian investment is road to wealth.
August 7, 2006... Despite a rigid bureaucracy and short-term economic concerns, India holds much promise for the long term, according to Sam Mahtani, manager of F&C's Indian Investment Company. In May's market mayhem, it was India that was one of the worst...

FOCUS: Volatility tests liontrust's strength.
August 7, 2006... Liontrust puts its faith in its managers and takes a long-term investment approach, despite market wobbles, says Jonathan Harbottle, marketing director. Frances Hughes reports. Much like the notion of marriage, Liontrust is all about...

AFI: Large caps may lead UK market rally.(Industry overview)
August 7, 2006... The domestic equity markets have exhibited some interesting behaviour so far in 2006. On a total return basis, the FTSE 100 index was up 8.4%, while the FTSE 250 rose 8.1% from January 1 to July 28, 2006. The returns from the Aggressive,...

FoFs: Patience and loyalty deliver results.
August 7, 2006... Julie Dent, manager of the F&C Multi Manager Investment Trust fund, favours a long-term and diverse approach. One current focus is on technology, which she predicts is set for a pick-up. While admitting to not being the most active of...

Fund Manager's Diary: 22-28 July 2006.
August 7, 2006... Saturday/Sunday The peace and tranquillity of country life is shattered by a golf lesson that reveals a poor grip. A small but crucial adjustment results in a temporary loss of ability and a distant memory that this was supposed to be...

COMMENT: Elitists perpetuate a "boring" economy.
August 14, 2006... Many commentators are warning that Mervyn King, governor of the Bank of England, could be in danger of losing his boring status. Most people would welcome the chance to be seen as interesting. But for central bankers it is a sign of failure....

Fund of fund sales rise year on year.
August 14, 2006... Statistics from the Investment Management Association show that second- quarter gross and net sales of funds of funds were up strongly on the same period last year. Total gross sales were up by 36%, at just over #2bn, while net sales...

Gartmore replaces Darley on European funds.
August 14, 2006... Tim Callaghan has taken control of Gartmore's European Growth and Sicav Eurobloc funds, previously managed by Adrian Darley. Callaghan, who has run Gartmore's European Focus fund since May 2005, took over Darley's funds earlier this...

Dresdner and Kleinwort launch funds onto Gresham platform.
August 14, 2006... Dresdner Kleinwort and Kleinwort Benson, an investment bank and private bank respectively from the Allianz group, have announced the launch of two products on the Gresham Defined Funds platform. The DEVA [Dresdner Equity Volatility...

IN BRIEF: Ram to again raid Barings for Hexam.(Brief article)
August 14, 2006... Neil Denman, an analyst at Barings, is expected to be appointed to Resolution Asset Management's emerging markets boutique, Hexam. If Denman makes the move, he will become the seventh Barings employee to join the firm, following Grant Shotter,...

IN BRIEF: Fidelity pays trail on Sicav range.(Brief article)
August 14, 2006... Fidelity International is paying trail commission on new lump sum sterling investments made into its offshore Sicav range. Advisers will be remunerated for holdings in 27 funds, including the China and India Focus portfolios, and a further 16...

IN BRIEF: Morley adds to fixed income team.(Brief article)
August 14, 2006... Morley Fund Management has expanded its global fixed income team with the appointment of Maurice Brown to a newly created fund manager role. The firm has also promoted Gabriela Schneider to the position of investment analyst. Copyright:...

IN BRIEF: Cofunds launches cash account.(Brief article)
August 14, 2006... Cofunds has launched a cash account for consolidated income. With effect from November 1, Cofunds will distribute all income on fund, Pep and Isa investments as consolidated payments, on the sixth working day of the following month....

IN BRIEF: Standard Life trust dividend rises.(Brief article)
August 14, 2006... The directors of Standard Life Investment's Property Income Trust have announced a quarterly dividend of 1.69 pence per ordinary share, an increase of 4% on the previous dividend. The trust is a Guernsey- domiciled investment company, listed...

BoE unlikely to meet inflation target.
August 14, 2006... The Bank of England is likely to fail to meet its inflation target for the first time ever, according to Mervyn King, the governor. Speaking at the Bank's quarterly Inflation Report press conference last week, King said he would probably...

French GDP growth exceeds expectations.
August 14, 2006... French GDP is growing faster than expected, with a rise of 1.1-1.2% in the second quarter, according to advance estimates. This compares with GDP growth of just 0.5% in the first quarter, against a market expectation of 0.7%. Meanwhile,...

Martin Currie Oeic range defies volatility.
August 14, 2006... Assets under management across Martin Currie's Oeic range have increased by 53% over the past 10 months. Fund sales over the past three months have also increased, despite market volatility. The group has #1.2bn in its Oeic range, compared...

US slowdown will have limited impact on global economy.
August 14, 2006... There is a growing consensus that America is in the early stages of an economic slowdown. If it does go into recession what is the likely impact on the world economy and global markets? The answer depends partly on the severity of the...

TRENDS: Fund of funds evolution continues.
August 14, 2006... Fund of funds sales have rocketed since the 1990s despite flaws in both fettered and unfettered portfolios - with twice as many products on the market and a new generation on the horizon. Back in 1999 there were only 175 funds of funds in...

STRATEGY: Chinese economy faces credit crisis.
August 14, 2006... The Chinese authorities have built up substantial reserves since the Asian currency crisis in 1997-8 - but an unsophisticated banking system has allowed credit to grow to worrying levels. The rise of emerging markets has been well...

CHANNELS: Striving for excellence in financial planning.
August 14, 2006... Nick Cann, chief executive of the Institute of Financial Planning, answers questions from Simon Hildrey. Q: How does the IFP help advisers? A: The role is two-fold. It is to help advisers become financial planners and improve the...

Q&A: Japanese rate rise is a return to normality.(Interview)
August 14, 2006... Diana Choyleva, a director of Lombard Street Research, answers questions from Will Jackson. Q: Japanese interest rates were set at 0.25% last month, marking the end of the zero interest rate period. How significant is this move? A:...

FEATURE: Going global.
August 14, 2006... Several fund management houses have launched Global Growth funds over the past year. But is this a sign of rising demand for global portfolios, or simply an attempt to increase interest in the sector? Simon Hildrey reports. The global...

Generalist investment trusts.
August 14, 2006... The generalist investment trust sector has been transformed over the past three years. Trusts have changed their fund managers, adopted a multi-manager approach or implemented a more active stockpicking strategy. Global trusts used to be...

Global multi-managers.
August 14, 2006... There are numerous multi-manager funds in the global sector but arguably the most high-profile recent launch is Skandia Investment Management's Global Best Ideas fund. This holds 10 managers who select their 10 best stock ideas. The fund is...

ANALYSIS: Anti-us bias boosts new star fund.
August 14, 2006... Guy de Blonay's New Star Global Financials has no big US names - it has a European focus and its biggest holding is an Italian bank - but it has outperformed by 150% over the past two years. Imagine you were putting together a global...

FOCUS: Light-touch lincoln finds it niche.(Company overview)
August 14, 2006... Lincoln Financial Group has 13 unit trusts run by outside managers, who are given substantial autonomy. It now plans to grow the range further in several niche areas. Frances Hughes reports. Lincoln Financial Group is the British business...

AFI: The merits of absolute returns.
August 14, 2006... Almost 60% of funds appearing in the Adviser Fund Index series have posted negative returns over the past six months. On average, members of the Aggressive AFI have performed the worst, with 68 out of its 108 funds (equivalent to 63% of...

FoFs: Fitzwilliam cuts UK equity exposure.
August 14, 2006... Sharon Segal, lead manager of the Fitzwilliam Multi-Manager Trust, has reduced the British equity allocation significantly over the past year in favour of bond and European equity funds. When Fund Strategy first profiled the Fitzwilliam...

Fund Manager's Diary: 28 July to 3 August 2006.
August 14, 2006... Friday Kick off the day with an 8am board meeting for Kilgarth Development Company along with my partner Andy Speedie. We refinanced this company last September and are about to submit a planning application to build two million square feet of...

COMMENT: Growth and inflation are separate issues.
August 21, 2006... There seems to be a widespread assumption in the financial markets that there is a trade-off between economic growth and inflation (see Merrill Lynch story, page 8). From such a perspective the challenge is to get the right balance between...

COMMENT: It seems that fund managers have turned deeply pessimistic.
August 21, 2006... Judging from the monthly Merrill Lynch survey it also seems that fund managers have turned deeply pessimistic. Even a bounceback in the equity markets has not led to an improved mood among managers. However, current GDP growth figures show...

BDO Stoy Hayward plans two launches in fourth quarter.
August 21, 2006... BDO Stoy Hayward Investment Management will unveil two new funds of funds under the Fitzwilliam brand in the fourth quarter of this year. Strategic Bond and Balanced Income will be launched directly onto the FundsNetwork platform. The...

Fidelity prepares to unveil third multi-manager.
August 21, 2006... Fidelity is to launch its third multi-manager fund this year when it unveils a multi-manager distribution fund in September. The fund, which will be managed by Richard Skelt and Simon Mungall, is expected to invest some 40% of its...

IN BRIEF: Fidelity plans investment forum.(Brief article)
August 21, 2006... Fidelity International has announced details of its investment forum, which will be held at seven venues across Britain from September 25-29. Fund managers speaking include Anthony Bolton, Jorma Korhonen, Tim McCarron and Chris Ralph, as...

IN BRIEF: Marlborough cuts fee on special sits.(Brief article)
August 21, 2006... Marlborough Fund Managers is discounting the initial charge on Giles Hargreaves' #126m Special Situations fund from 5% to 3.25% on all direct investments until October 31. The standard 3% commission will still be payable to IFAs, while those...

IN BRIEF: Resolution boosts fixed interest team.(Brief article)
August 21, 2006... Resolution Asset Management is to strengthen its fixed interest team with the appointment of Stuart Thomson, senior economist and bond strategist at Charles Stanley Sutherland. Thomson, who joins Resolution this week, will take up the position...

IN BRIEF: Norwich Union sales breach #1bn.(Brief article)
August 21, 2006... Norwich Union has reported that sales of its collective investments in the first half of 2006 were worth #1.1bn, compared with the same period last year, when they were worth #513m. This is the first time sales of collective investments have...

Wins warns of share redemption crisis.
August 21, 2006... Three UK smaller companies investment trusts that adopted semi-open- ended share capital structures last year face uncertain futures, according to Wins Investment Trusts. In bids to control their discounts and stave off the threat of...

Strike price rises on Schroder's covered calls.
August 21, 2006... The average strike price of covered call options in the Schroder Income Maximiser fund has risen from 109.8% of the initial strike price in May to 112.1%. The rise in the strike price, which is set quarterly, was the result of the high...

F&C UK Dynamic fund manager increases cash and cuts stocks.
August 21, 2006... Makis Kaketsis, manager of F&C's #65m UK Dynamic fund, increased the fund's cash position and cut the number of stocks in the portfolio as an immediate response to the market correction in May and June. While Kaketsis says the recent...

IN BRIEF: UK consumer price index rises.(Brief article)
August 21, 2006... The UK consumer price index was up 2.4% in the 12 months to July 2006, according to National Statistics. The corresponding CPI increase for the previous month was 2.5%. The main contributors to the 0.1% decrease from June to July were...

IN BRIEF: Trust launches children's plan.(Brief article)
August 21, 2006... The Scottish Investment Trust has launched an investment trust savings scheme for children. Stockplan: A Flying Start is in response to the rising cost of education and expected increase in graduate debt. The minimum monthly investment is...

IN BRIEF: Seminars aim to clarify pensions.(Brief article)
August 21, 2006... Lane Clarke and Peacock is holding two free seminars, 'Funding Strategy and Investment Policy for Corporate Sponsors' on September 7 and 14, 2006. The seminars are intended to help company treasurers and directors understand the range of...

Pessimism prompts shift into bonds.
August 21, 2006... Global fund managers are shifting their preferences towards bonds as a result of deepening pessimism about the world economy, according to the latest Merrill Lynch monthly survey. Managers have become far less pessimistic about bonds than...

AITC widens membership to include VCTs.
August 21, 2006... The Association of Investment Trust Companies has announced the inclusion of venture capital trusts in its membership. The association has already received applications from 70 VCTs, representing 78% of the VCT sector, which is worth more than...

US government bond yields fall over week.
August 21, 2006... American government bond yields fell last week as investors started to reassess their views on the asset class. The strengthening of the bond market seemed to be the result of a combination of growing pessimism over economic growth and the...

Investment trusts put multi-manager method to the test.
August 21, 2006... F&C and Witan are two of the largest and best-known investment trusts. In a bid to bolster their performance, over the past two years both have opted to outsource the management of significant proportions of their trusts. However,...

TRENDS: Keeping track of risks and rewards.
August 21, 2006... The rise in index-tracking portfolio management techniques has created a demand for indices that are not necessarily constrained by the value of the companies that make up the benchmark. When I started out in this business, more years ago...

STRATEGY: Emphasis shifts towards large-caps.
August 21, 2006... The near seven-year outperformance of small and mid-cap companies could be over as fund mangers become more risk averse, switching to large-cap stocks as liquidity is squeezed. For the past three and a half years mid and small-cap...

Q&A: The long and the short of a top-down strategy.(Interview)
August 21, 2006... Ken Adams, manager of the Swip Absolute Return Macro fund, answers questions from Adam Lewis. Q: What is the investment philosophy behind the fund? A: The fund is all about macroeconomics, with the investment approach aimed to take...

FEATURE: Question time.
August 21, 2006... The first Adviser Fund Index mid-season questionnaire reveals a strong belief among AFI panellists that equities, in particular large caps, will outperform over the next 12 months. James Teasdale examines the survey's findings. Equities...

Panellists' views on the AFI.
August 21, 2006... The AFI panellists were asked to give their predictions for the value of the three AFIs at the end of 2006. For the Aggressive and Balanced AFIs, the predictions range from 124 to 150, while the panellists expect the Cautious index to end...

Panellists' macro views.
August 21, 2006... When asked to rank the four main asset classes in descending order of expected returns over the next 12 months, equities, commercial property, bonds then cash is the order chosen by six panellists. With 12 respondents expecting equities to...

Panellists' views on equities.
August 21, 2006... Japanese equities should provide investors with the best returns over the next 12 months and the next three years, according to 43% of the panellists polled. In contrast, North America is the most popular choice for the worst-performing...

Panellists' views on bonds and commercial property.
August 21, 2006... While most panellists expect fixed interest assets to underperform both equities and commercial property over the next 12 months, there is a wide range of views as to which type of bonds are likely to perform best or worst over the period....

AFI panellists' investment processes.
August 21, 2006... The 14 panellists were asked to gauge how important certain factors are when deciding which funds to recommend within their AFI portfolio recommendations. Each panellist decided whether a particular factor was "extremely important", "very...

ANALYSIS: Royal London bucks large-cap trend.
August 21, 2006... Royal London's mid-cap-focused Strategic Growth fund was launched at a time when investors were piling into large caps. But manager Leigh Himsworth remains confident in the sector. It was perhaps not the best time to launch a mid-cap...

FOCUS: Omam's hands-off approach pays off.
August 21, 2006... Old Mutual's policy of letting individual teams decide their own investment strategy has worked well over the past year, with 16 out of 22 funds in the first or second quartile. Will Jackson reports. Old Mutual Asset Managers' range of...

CHANNELS: Making the transition to financial planning.(Interview)
August 21, 2006... Brett Davidson of FP Advance talks to Simon Hildrey about financial services in Britain and Australia. Q: What did you do in Australia? A: I joined the financial services industry in January 1991. I started as a pensions and...