Retail fund range with institutional overtures

Initially consisting of two sub-funds, Frontier Conservative and Frontier Moderate, managed by Frontier Capital Management, the full range will be available later this year.
With a minimum investment of US$100,000 or sterling or euro equivalent, they are structured investment products that will be available both in the UK and offshore and suitable for most UK financial advisers' clients, said PIL.
PIL believes the funds' composition of eight non-correlated global asset classes with specific benchmark weightings is unique. The benchmark is broken down as follows: global equities, 22 per cent; global bonds, 25 per cent; emerging equities, emerging bonds and managed futures, 5 per cent each; commercial property and hedge funds, 15 per cent each; and commodities, 8 per cent.
PIL said this kind of allocation was ideal for its retail clients looking for a strong central investment for their retirement.
Frontier was chosen because of its passive management style, which PIL believes should generate higher returns with reduced costs.
But Frontier will apply 'tactical tilts', changing the benchmark weightings within set parameters to minimise underperformance.
David Barclay-Miller, head of structured investments at PIL, said until the FTSE 100 reached previous peaks, investors were looking elsewhere.
"Unlike pure hedge funds, we are offering long-only multi-asset risk in a diversified portfolio as a one-stop-shop product," he said.
Mike Azlen, managing partner of Frontier added back-testing had proved the investment concept was right. "Testing the Conservative fund over five years produces a 7.3 per cent return net of fees compared with 5.6 per cent for UK gilts and -0.9 per cent for the FTSE 100."