Innovation in Moderation
By Amanda Newman
Overture Multi Asset Platform Fund: Frontier Moderate
| Type | Oeic |
| Aim | Growth of 7 per cent above Libor by investing passively in equities, bonds, commercial property, commodities, hedge funds and managed futures |
| Minimum investment | Lump sum £55,000, $100,000 |
| Investment split | 100% in equities, bonds, commercial property, commodities, hedge funds and managed futures |
| Isa link | No |
| Pep transfers | No |
| Charges | Initial 5%, annual 1.5%, 10% performance fee |
| Commission | Initial 4%, renewal 0.25% |
| Overall | 6/10 |
Structured product provider Product Innovations has established its two Oeic funds for high net worth clients that take a passive investment approach to eight asset classes. Like the Overture Multi Asset Platform Fund: Frontier Cautious fund, the Overture Multi Asset Platform Fund: Frontier Moderate fund will invest in index trackers and derivatives which will be managed according to a benchmark of 25 per cent global bonds, 22 per cent global equities, 15 per cent commercial property, 15 per cent hedge funds, 8 per cent commodities, 5 per cent emerging equities, 5 per cent emerging bonds and 5 per cent managed futures.
Highclere Financial Services partner Alan Lakey thinks the moderate fund may be a worthwhile holding for an investor or pension fund looking for a core holding or diversification away from existing areas.
"As the name suggests, this innovative product aimed at high-net -worth individuals and pension funds seeks to invest over eight asset classes including hedge funds and managed futures. There are two funds – moderate and conservative. Historical models suggest that these funds could outperform equity or gilt indices." says Lakey.
Lakey points out the fund has a Cayman Islands domicile and is listed in Ireland. He notes that the commission is up to 4 per cent initial and 0.25 per cent renewal which he believes is at least as good as most Isas and unit trusts.
However, he is less enthusiastic about the charges. "Much is made of the need for low charges, but the funds carry a 5 per cent initial charges and a 1.5 per cent annual charge. In addition there is a performance fee if he fund breaches its watermark," says Lakey.
Looking for possible competitors Lakey says: "The product is aimed at competing with existing unit trusts, bond and pension funds but there is no comparable investment."
BROKER RATINGS
Suitability to market: Good
Investment strategy: Good
Charges: Average
Adviser remuneration: Good