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Top fund closes, bond smart beta and new Threadneedle brand: Your fund news digest

03 April 2015

FE Trustnet rounds up the fund news of the past week, including TwentyFour’s move to limit flows into a top-rated fund and the launch of a new smart beta bond range.

By Gary Jackson,

News Editor, FE Trustnet

After another busy week in the asset management industry, FE Trustnet gives you a quick run through the news stories that have hit the headlines.

Some funds have soft-closed, new products have been launched and one group has unveiled plans to take on firms such as Nutmeg by rolling out their own online advice service.

Here’s what’s been happening this week.


TwentyFour to soft close Dynamic Bond fund

TwentyFour Asset Management plans to restrict flows into its five FE Crown-rated PFS TwentyFour Dynamic Bond fund by lifting its minimum investment to £50m, subject to regulatory approval.

The fund, which is managed by the firm’s founding partners Gary Kirk and Eoin Walsh, launched in April 2010 and has grown to £735.2m in size. Growth has been rapid over the past year or so, as the fund started 2014 with assets of just over £200m.

Mark Holman, chief executive of TwentyFour, said: "We have seen strong inflows into the Dynamic Bond fund over the last 12 months as we continue to build up our track record. Restricting inflows will enable the portfolio managers to carry on managing the fund in a truly strategic manner without compromising liquidity, quality, or conviction."           

FE Analytics shows the fund has made top-decile return of 50.13 per cent since launch, making it the fifth best performing portfolio in the IA Sterling Strategic Bond sector.

Performance of fund vs sector and benchmark since launch

 

Source: FE Analytics

PFS TwentyFour Dynamic Bond also appears on the FE Research Select 100, winning its place because of “a very distinctive approach” that sees it hold between 65 and 85 high-conviction positions rather than the hundreds of bonds that are owned by its typical peer.


Neptune plans unhedged version of Taylor’s Japan Opps fund

Neptune Investment Management will offer discretionary investors access to FE Alpha Manager Chris Taylor’s strategy without a portfolio-wide currency hedge on the yen.

The Neptune Japan Institutional fund is set to launch in June 2015, subject to FCA approval. It will be a mirror of his £550m Neptune Japan Opportunities fund and will have hedged and unhedged share classes, allowing discretionary investors to manage currency exposure by themselves.


The new fund will own the same stocks as Taylor holds in his five FE Crown-rated Neptune Japan Opportunities fund, which is the top performing fund in its IA Japan sector over 10 years with a 196.23 per cent total return.

Performance of fund vs sector and benchmark over 10yrs

 

Source: FE Analytics

Neptune Japan Opportunities also appears on the FE Select 100. The FE Research team notes that currency is a major influence on the fund’s strategy, as Taylor believes the yen needs to weaken significantly if the economy is to experience a meaningful recovery.

“The manager started removing his exposure to currency movements in the yen in 2009 and this has been a massive driver of performance since then: when the currency weakens the fund does well and vice versa,” FE’s analysts said.

“At the end of 2012 the government set out on a course of weakening the currency and the fund has been a major beneficiary, making 51 per cent in 2013, which is double its peer group average. However, in 2010 currency worked against it and wiped out gains made through stock selection.”


Investec Wealth eyes online wealth service

Investec Wealth & Investment has named Jane Warren as its newly created head of digital as it plans to roll out an online simplified advice service later this year.

The firm plans a broader online push, which Warren will oversee, and one element is an advice service that will target "a broader range of clients" and take on the likes of Nutmeg, which focuses on passive investments.

Jonathan Wragg, chief executive of Investec Wealth & Investment, said: “Our digital services will play a growing role in driving client acquisition, engagement, market differentiation and growth. Our investment in this area puts us in a strong position to extend our investment management expertise to a broader range of clients.”

Warren joined Investec Group, then Carr Sheppards Crosthwaite, in May 1994 and has held roles such as head of business projects during her time at the firm.


Lombard Odier and ETF Securities partner for smart-beta bond ETFs

Lombard Odier Investment Managers and ETF Securities have joined forces to launch a range of UCITS-compliant fundamentally-weighted fixed income exchange-traded funds (ETFs).


Before the deal, Lombard Odier IM’s fundamental fixed income strategies were only available to mutual fund investors but the partnership means smart beta bond products can now be offered to investors through wealth managers, financial advisers and investment platforms.

Conventional bond trackers follow a traditional market capitalisation approach, which means that issuers with the most debt make up the largest share of the index. A fundamentally-weighted approach assesses fundamental factors for government and corporate issuers to prioritise their ability to repay debt.

Hubert Keller, chief executive of Lombard Odier IM, said: “In fixed income markets, a traditional passive approach lends money to the most indebted. If someone already owes you a lot of money, is it a good idea to lend them more?”

“We strive to offer bond investors greater diversification by lending based on issuers’ ability to repay rather than their ability to borrow. We use fundamental factors, based on the real economy, to determine the most appropriate allocation."

The initial product listing on the London Stock Exchange is planned for mid-April and will see the launch of ETFs providing fundamentally-weighted exposure to global government bonds, global corporate bonds and European corporate bonds. An emerging market local bond ETF is scheduled to be launched in early May.


New Columbia Threadneedle Investments brand unveiled

Threadneedle Investments launched its new brand Columbia Threadneedle Investments this week, alongside a new logo, visual identity and brand positioning focused on the client: “Your success. Our priority.”

The firm announced in January that it would combine the capabilities, reach and resource of Threadneedle and its US-based affiliate Columbia Management under the new brand identity.

Campbell Fleming, chief executive for EMEA at Columbia Threadneedle Investments, said: "We have brought together two well-established, successful asset managers under one brand, offering clients a broader set of capabilities and a truly global presence. Together we have more than 450 investments professionals responsible for more than $500bn in assets.

“For Threadneedle it builds on our established businesses in EMEA and Asia Pacific. Under the banner of Columbia Threadneedle Investments we now also have a brand presence in North America, the largest investment market in the world.”

Although the combined group is operating under one brand, the established investment teams, strategies and processes in place at both firms will not change. In addition, there will be no change to existing funds or client portfolios and mandates as a result of the new brand.  

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.