In what is believed to be the first of its kind in the UK, Foster Denovo has transformed two of its open ended investment companies (OEIC) into actively managed diversification funds.
Foster Denovo has transitioned the pair of funds to a world equity sector allocation mandate and a real assets mandate, both managed by State Street Global Advisers.
The WS Sequel World Equity Fund is an actively managed fund.
Sector rotation strategies sees the movement of money invested in stocks from one industry to another.
While this is a popular investment process Foster Denovo said its new fund is the first of its kind in the UK to formalise the strategy within a single fund.
Declan McAndrew, head of investment research at Foster Denovo, said: “We wanted to further enhance diversification within our model portfolios by accessing specialist asset exposures and active allocation strategies that weren’t available from ‘off the shelf’ providers, so we went ahead and built our own with help from Elston Consulting.
“We are in a great position to be able to commission specialist portfolio construction solutions such as this for our advisers.
“Having appropriate options when it comes to the diversification of portfolios is a key area for us and these two funds provide useful, broader investment options for our advisers.”
The WS Sequel Diversified Real Assets fund is an actively managed fund where the manager allocates to different “liquid real asset classes” including: commodities, gold, infrastructure, and property securities, depending on their relative return outlook.
The fund is benchmarked against the Elston Strategic Real Assets Index which represents a strategic weighting scheme for liquid real asset exposures.
Frederic Dodard, head of portfolio management at State Street Global Advisers said: “We have long-standing experience both in sector equity allocation and real assets strategies, as well as the ability to implement those strategies in a liquid and cost-efficient manner.”
Head of research at Elston Consulting, Henry Cobbe, added: “Our focus is on supporting UK advisers, so we are delighted to help bring together the practical experience of Foster Denovo’s Sequel Investments, the extensive resource at State Street Global Advisers, and our own research and development capabilities across portfolios, funds and indices for the creation of these established strategies within an innovative adviser-friendly fund format.”
tara.o'connor@ft.com
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