The Virgin Climate Change Fund
The objective of the Virgin Climate Change Fund is to produce market-beating returns by investing in highly performing, environmentally focused companies.

This new fund launch comes at a time when consumers are increasingly demanding more information about the environmental damage companies cause. Research conducted by Virgin reveals that over ten million investors have favoured products and services from environmentally aware companies during the past year.

Virgin has brought in GLG Partners to act as fund adviser, a company which until now has typically only worked for high-net-worth individuals and financial institutions.

GLG already runs a similar fund to the Virgin Climate Change Fund, which returned 7.02 per cent net of fees between January and December 2007, compared with the MSCI Europe Index return of 1.62 per cent for the same period.

Min. investment: £50 per month or £500 lump sum
Initial charge: Nil
Annual management fee: 1.75 per cent
Contact: Call 08456 10 20 20 or visit the website www.virginmoney.com/funds

Philip Johnson says:
This is an actively managed fund focusing on investing in select companies who are driving outstanding profit growth and are environmental leaders in their industry.

Unlike typical ‘green’ funds, the Virgin Climate Change Fund can invest in all industry sectors, but will only invest in companies with lighter-than-average environmental footprints for their sector. This strategy aims to capitalise on research suggesting that companies with a strong environmental focus can outperform their ‘dirtier’ competitors.

At least 75 per cent of the fund will be invested in an environmentally filtered basket of European shares. Up to another 15 per cent will be invested in ‘solution adopters’ – companies adopting environmental best practice – and up to a further ten per cent will be invested in ‘solution providers’ – firms specialising in offering solutions to environmental problems.

There are no initial charges. However, there is a 1.75 per cent annual management charge and a 20 per cent performance-related fee for outperforming two benchmarks – the Bank of England base rate and a ‘high water mark’, which is the previous highest unit price reset on a rolling six-monthly basis.

Climate change is an issue that affects us all, and this new fund will undoubtedly appeal to a large number
of investors.

4 Stars

Investec Global Dynamic Fund
Launched on 31 January, this fund aims to invest across a wide range of global equity markets and products, no longer restricting itself to the technology sector.

The new onshore fund will be managed as a mirror fund to the offshore Investec GSF Global Dynamic Fund, which has already delivered top-quartile performance for its investors.

Managed by Jacob Robbins, along with Investec’s 4Factor team, the main objective is to offer investors the flexibility to capitalise on opportunities as they arise across a variety of sectors by capturing them in one fund.

Minimum investment: £1,000 lump sum or £100 per month regular payment
Initial charge: 4.5 per cent
Annual management fee: 1.5 per cent
Contact: For more information, call 020 7597 1800 or visit www.investecassetmanagement.com

Robin Amlôt says:
Investec has given its Global Technology Fund a serious makeover. More than 99 per cent of investors voted to change the remit of the fund, creating a mirror fund of Investec’s Guernsey-domiciled Global Dynamic product.

Technology, it seems, is no longer the theme it once was but rather, believes Investec, a key part of almost every company’s business. The aim is for long-term capital growth, primarily through investment in global equities without being restricted to the technology sector.

The ‘new’ fund will be managed actively and at least two-thirds of its investments will be in equity instruments. It will use Investec’s proprietary bottom-up stockpicking approach, investing in companies expected to benefit from Asia’s economic growth, as well as larger firms in more developed markets.

The fund is managed within Investec’s 4Factor team and will invest in a range of equity markets and products, benchmarked against the MSCI World Index. The technology fund was previously run by Pauline Nepgen, who left Investec for Threadneedle last year. Existing investors have been switched into the new vehicle.

What is the significance of the team approach? Will 4Factor be a ‘fantastic four’ for the Global Dynamic Fund? A growing number of fund management houses are turning to a team-based, rather than star player, approach. The advantage is that the departure of a fund manager need not upset performance.

Investec’s 4Factor process ranks stocks out of four, based on four criteria: valuation, dynamics, strategy and technicals. This screens thousands of stocks every week, with companies that score near 16 seen as likely candidates for the portfolio.

Investec believes its approach and the 4Factor quantitative screen have been major drivers of performance. The track record of the firm’s offshore Global Dynamic Fund over the past two years would seem to bear this out: top-quartile performance and a return of 20 per cent to investors.

The onshore fund is an open-ended investment company and there is some good news on the charges front. The annual fee is coming down to 1.5 per cent from 1.75 per cent previously. While you should never invest purely on the basis of costs, this does mean that a little bit more of your money is working for you.

3.5 stars

Kotak Indian Multi-Cap Fund
This Luxembourg-registered open-ended SICAV, managed by Kotak Mahindra UK Ltd (KMUK), is the first India-specific multi-cap fund from the stable of an asset manager focused solely on Indian investments to be made available to investors across Europe through a wide network of distributors.

Kotak states that this SICAV fund, based in Luxembourg, confirms its commitment to Europe. Aiming to give European investors a slice of the India growth story, this daily traded fund will invest across the market capitalisation spectrum, with a bias towards large and medium companies.

India is currently one of the leading investment destinations, and the huge capital inflows in the country mirror the confidence of foreign investors in the Indian economy’s ability to match this expectation.

Minimum investment: US$1,000
Initial Charge: 5.25 per cent
Annual management fee: 1.5 per cent
Contact: www.kotak.com

James Davies says:
The fund seeks to deliver long-term capital appreciation through investment in shares and equity-linked instruments issued by companies registered in India or having a substantial proportion of their business in India.

India has been one of the most talked about of the emerging markets. This offering from Kotak Mahindra (UK) Ltd aims to build on this interest.

The fund is registered in Luxembourg, under a SICAV structure (roughly equivalent to a UK OEIC) and managed by a subsidiary of Kotak Mahindra Group, an Indian financial institution.

Investment in India is often mentioned in the same breath as that of China, but to think of them as remotely similar cases does them both a disservice. The truth is
that, despite both being emerging economies with populations of over one billion, there is much to differentiate between them.

One advantage India has over other emerging markets is the high level of IT literacy in the country and widespread use of the English language. Indeed, there is little doubt in my mind that for those who are keen to take advantage of the opportunities presented by India (particularly in terms of infrastructure), a long-term allocation to Indian equities should be considered. However, the country remains beset by corporate governance issues and restrictive bureaucracy.

Kotak Mahindra is not a well-known name in Europe or the UK, and its expertise encompasses a range of disciplines, from car hire and insurance to loans and banking: not what I would call a specialist asset manager. That said, its proximity to the Indian economy might provide a unique perspective, which an overseas fund manager would not be able to gain.

The fund will have a minimum weighting to large-cap stocks of 40 per cent, with 30 per cent in mid- and small-cap stocks. The remaining 30 per cent will be allocated to either area of market capitalisation as a tactical call, to benefit from opportunities.

Given the rather scant available information on Kotak Mahindra, the investment process being applied, the fact that this fund is not ISA/PEP-able and the availability of other funds that invest in India, I am rather reluctant to endorse this new fund. I am, however, keen on India funds in general for the long-term investor.

3 Stars
SWIP Multi-Manager Diversity Fund & Select Boutiques Fund
Scottish Widows Investment Partnership (SWIP) has entered the fund of funds market with the launch of their Multi-Manager Diversity Fund and Multi-Manager Select Boutiques Fund.

These two funds, managed by Mark Harries and Simon Wood, will provide investors with access to a range of specialist investment funds and will be managed with an absolute returns bias.

The SWIP Multi-Manager Diversity Fund will invest in a portfolio of funds, which provide
access to a wide range of asset classes, including equities, bonds, cash, property and a range of alternative assets, as well as geographic regions.

The Multi-Manager Select Boutiques Fund, on the other hand, aims to achieve long-term capital growth through investment in a portfolio of funds with exposure to UK and international equity markets.

Minimum investment: £1,000
Initial charge: Five per cent
Annual management fee: 1.25 per cent
Contact: www.swip.com/multimanager

Andrew Wilson says:
Multi-manager, or fund-of-fund, investments have increased in popularity recently as investors have begun to recognise the benefits of managing risk and diversification, and many financial advisers have finally admitted that they do not have the capabilities to effectively build and manage investment portfolios.

This has resulted in investment companies looking to launch their own products in order to benefit from this increased popularity and trying to position these products as attractively as possible from a marketing perspective.

When asked why it has launched these funds, SWIP has replied, ‘Both funds have a distinct appeal to the market.’ In order to achieve this, SWIP has recruited the multi-manager investment team from Cazenove, headed by Mark Harries, to launch and run their multi-manager proposition.

That said, there are a number of significant investor benefits from an offering such as this. A fund-of-fund approach will be a sensible strategy for most investors, and while the Select Boutiques fund invests only in equities, the Diversity fund does benefit from a wide range of different asset classes. This is exactly how an investment portfolio should be run.

However, while SWIP claims that its funds will be managed with an ‘absolute return bias’, this terminology is misleading. What this means is that the fund managers are able to take bigger risks away from their benchmark or even make significant changes to the asset allocation itself.

The benefits of having exposure to a wide range of non-correlated asset classes are greatly reduced if the fund manager has discretion to produce performance significantly divergent from the benchmark or change asset allocation weightings.

Another potential issue is charges. Multi-manager arrangements have two layers of charges, the charges imposed by SWIP and those on the underlying funds, even though these are not always quoted. There is, however, a third layer where products are sold through financial advisers. These funds pay initial commission of three per cent and then a renewal commission of 0.5 per cent every year, and these charges are also taken from the funds.

3 Stars