Legg Mason launches US large-cap fund

The Batterymarch US Large Cap Equity fund will be managed on a team basis, using a proprietary quantitative stock selection process. It will hold 150-200 stocks in its portfolio and be invested across 20 sectors. It will have a tracking error of between 2% and 4% relative to the S&P 500 index.

To achieve the low tracking error, the fund will always hold the largest 100 companies in the S&P 500. It will then hold over and underweight positions in these stocks based on Batterymarch’s quantitative research process.

The fund, which is being targeted at fund of funds managers and top-end intermediaries, will have a minimum investment of $10,000 (£5,200). It will carry a negotiable 5% initial charge and 1.2% annual management fee.

Batterymarch is currently the sub-adviser to two US Large Cap mutual funds, a Canada-based vehicle for retail investors and an offshore fund for institutions. These funds are managed against the S&P 500 and had a total of $278m in assets under management as of December 31, 2004.

The US Large Cap Equity fund will be the third Batterymarch fund in Legg Mason Investments’ proprietary offshore fund range. The group says it does not rule out adding it to its British onshore fund range in the future if there is sufficient demand.