31st July 2008
Trustnet Bulletin: Guaranteed funds launch as global sectors struggle
While possibly not directly affected by the subprime debacle, and with stable financial institutions, economies such as China, India and Vietnam are export-led and affected by Western consumption patterns as much as aggressive domestic wage and commodity inflation.
Old Mutual UK Select Smaller Companies Fund
The Old Mutual UK Select Smaller Companies Fund aims to generate long term capital growth through investment in UK smaller companies, where the skilled stock picker can add significant value.
The fund, managed by Citywire AAA rated fund manager Daniel Nickols, is top quartile over 1, 2, 3, 4 and 5 years and ranked number 1 in the IMA UK Smaller Companies sector since launch in February 2001. The Old Mutual UK Select Smaller Companies Fund is rated AAA by both Standard & Poors and OBSR.
In the recent Professional Adviser Awards 2008, Old Mutual Asset Managers won the Best Smaller Companies Group award.
To find out more visit our website or call us on 0808 100 2715.
Source of performance figures: Morningstar, Inc. All rights reserved. Bid to bid, net income reinvested. Sterling terms. Periods to 01/07/08.
UK equity markets dropped significantly over the past year, as a result of the credit crunch. This drop is clearly reflected in our data, with a sector average loss of 18.3% over the year to July 2008. Given fears of a UK recession, investors should maintain a cautious outlook for this sector.
Not only are these funds highly exposed to growth stocks, which have seen negative growth over the past year, but the average beta suggest a momentum investing approach may be the best on to adopt.
Current market conditions and the recent changes to CGT have prompted providers to offer new product packages, and to differentiate insurance bonds from other types of fund investments in order to attract investors back
One measure has been to bring out guaranteed funds or guaranteed products that link to insurance bonds and pensions - a concept that is not new to certain players in the sector, such as US firms Hartford Life and MetLife.
The prospect for Europe and the US remains challenging according to London based fund of hedge fund managers Blackstone LLP, but the group - which has £300m under management – is hoping a keen eye on global macro and commodity strategies coupled with a strong aversion to equities will produce returns despite the bleak outlook.
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