New legislation helps iimia fund of funds

Launched on January 14, the Growth fund is managed by iimia’s chief investment officer Nick Greenwood. Former Exeter fund manager Richard Scott runs the Growth & Income fund, while Daniel Lockyer is in charge of the Income portfolio. Each fund will run a concentrated list of some 40 holdings, and Greenwood says while the ratio between holding open-ended funds and investment trusts will vary, a 70/30 exposure in favour of investment trusts is likely.

Like the group’s existing retail fund of funds, iimia Accelerated, the funds are run on a global basis. Although each has the ability to hold property funds in their portfolios, Greenwood says none do at present.

“Equities are not very expensive at present, so all three funds are predominantly invested into that asset class. However, because of the requirements on the Income fund, it will always remain invested in some fixed interest funds,” he says.

Both George Luckraft’s Framlington Equity Income fund and Adrian Frost’s Artemis Income fund are represented in Lockyer’s current top 10 list of holdings.

Launched in April 2003, Greenwood’s Accelerated fund has taken in some £23m in assets under management. Over the 12 months to January 17, 2005, it was ranked third out of 74 funds in the IMA Active Managed sector, according to Standard & Poor’s. This followed a return of 17.2% compared with the sector average of 9.5%.

All three funds will carry performance-related annual management charges. They will be the first Financial Services Authority authorised funds to use interest rate-related fees rather than the usual index-related structure. David Crouchen, director of regional sales, explains: “The base annual management charge for each fund will be 1%. If, however, we outperform sterling Libor [London Inter-Bank Offer Rate] plus 2%, we will add 15% of the outperformance on to the annual management charge.”

The minimum investment into the funds is £5,000, and for intermediaries iimia is offering an initial commission of 3% plus a renewal fee of 0.5%.