By ROBERT HARLEY 05/12/2007
The above fund is structured to provide mainly capital returns at low levels of volatility by investing in very short dated government bonds together with a modest exposure (approximately 18%) to blue chip European equities. The management team also apply derivative overlay strategies at the margin which are intended to provide an additional 1-1.5% of returns per annum. Over a market cycle the fund is designed to provide an annualised capital return capital approximately equivalent to the Sterling London Interbank Offered rate.
We believe this fund has attractions for investors who may not have the benefit of a tax efficient wrapper and are seeking a less volatile return structure. The fund has a track record dating back to 2001; historically the underlying volatility of the fund has been similar to that experienced holding quality corporate bond funds. The fund is eligible for ISA investment, a capital drawdown facility is also available.