Market News

Flurry of Fund Launches in Time for ISA Season

February 24, 2017

February has seen flurry of new fund launches, as the investment industry gears up for what it hopes will be a better ISA season than 2016, when inflows stood at record lows. The biggest launch is expected to be from Woodford Investment Management, which is launching a new Income Focus fund before the end of the tax year.

Elsewhere there have been a number of high profile fund manager changes.

Woodford Launches Higher Income Fund

Woodford Investment Management confirmed it will offer a new Income Focus fund on March 20, targeting a higher yield that its current Equity Income fund.

This new fund will also be managed by star fund manager Neil Woodford, who set up the company in 2014.

New Role For City Superwoman

Helena Morrissey, formerly chief executive of Newton Investment Management, will join L&G Investment Management as head of personal investing in May. She will also join L&G’s board of directors. Morrissesy is a high-profile campaigner for gender equality, and set up campaign group the 30% Group which aims to get more women on the boards of FTSE 100 companies.

She left Newton in August last year after more than 20 years with the company. Until recently she chaired the Investment Association, the trade body for investment managers. She was replaced this month by Peter Harrison, Group Chief Executive of Schroders.

It is thought that L&G hopes this appointment will help it appeal to a wider demographic, including women, who traditionally buy fewer investment products than men.

Talking about her new role she said: “I wanted a role where I could make a real different to how the industry engages with its customers. I looking forward to building a savings business with strong and direct connections with customers, including those who never really thought about investment before or find existing offering off-putting.”

Manager Changes at Jupiter

Alistair Gunn has taken up the reins of the £83 million Jupiter Growth & Income fund, after interim manager Steve Davis stood down.

Gunn currently runs the equity portion of the Distribution fund, but this is his first stand-alone fund.

Davis had been running the fund since Chris Watt left in a year ago. But the performance has been hit following the Brexit vote. The fund lost 7% last year, making it one of the worst-performing funds in its sector.

Stephen Pearson, chief investment officer at Jupiter said that Gunn had built “a strong track record on the multi-asset funds he co-manages”.

He said Davies had run this fund on an “interim basis” so had not made significant changes to its portfolio. This is expected to change under Gunn.

Davies will continue to run the Jupiter UK Growth fund, and the Jupiter UK Growth (JUKG) investment trust.

PIMCO Launches Absolute Return Fund

PIMCO, the global bond investor, has launched a new absolute return fund, but one that claims ti offer a different strategy to most of its peers. Rather than invest in equities this fund will invest in the global mortgage-backed securities market – worth an estimated $11 trillion worldwide.

But like all absolute return funds, this GIS Mortgage Opportunities fund aims to generate consistent positive returns through the market cycle.

This will be a global fund, investing in securitised assets from a number of different regions.  It will be managed by Daniel Hyman, Alfred Murate and Josh Anderson, who say they will aim to actively manage exposure to a number of risk factors, including interest-rate risk and credit risk.

Hyman says: “Given the historically low yields on core bonds, and the correlation of corporate credit to equities, a dedicated allocation to securitised assets can help investors improve the overall diversification of their portfolios, while also potentially enhancing returns.”

The charges on the fund will be 1.59%.

Two New Bond Funds

Brexit has created an opportunity for Franklin Templeton has launch two new fixed income funds: one focused UK corporate bonds and one on UK gilts. These funds will be run by David Zahn, head of European fixed income, and manager Roderick MacPhee. They will be sub-funds in Franklin Templeton’s OEIC range and have annual charges of 0.35% for the UK fund and 0.25% for the gilts fund.

These new offerings aim to build on the success Franklin Templeton has had with its range of European fixed income funds.

Zahn said the UK economy had “proven resilient” in the past few months. “Despite warnings of a slowdown fundamentals have strengthened since the decision to leave the EU, providing attractive investment opportunities.”

Source: Morningstar. Emma Wall | 24/02/2017

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