SLI portfolios focus on market trends

Standard Life Investments (SLI) is launching two funds this month to take advantage of market trends: UK Recovery and European Equity Income.

The UK Recovery fund is the first retail product for David Cumming, the firm’s head of UK equities. Claire Marshall, investment director of mutual funds, says the fund aims to capitalise on improvement in the economic backdrop.

“We have seen the worst fall in equity markets since 1974 and a lot of negative sentiment,” says Marshall. “We are not calling the bottom of the market, but the key opportunity for this fund will be the market turning, which is why we want to launch now.”

The 40-70-stock portfolio will include holdings in the travel and leisure, retail, media, financials and support services sectors. The fund will generally go underweight defensives such as pharmaceuticals and utilities.

European Equity Income has been created for Will James and will be the first fund he has managed for SLI since he joined in 2007. It will be launched on March 23 and will sit in the Investment Management Association (IMA) Europe
ex UK sector.

The fund has a yield ­target of 115% of the FTSE World Europe ex UK index. Marshall says James has run a model port­foliofor six months and sees this as a realistic aim.

The European Equity Income fund will take a stock-specific approach, with sector and country limits secondary to bottom-up stock selection, Marshall says.

“The fund will benefit from the trend for investors looking further afield for income,” she adds.