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Fund Objective
Royal Skandia
believe their new Global Best Ideas Fund represents a breakthrough in
the fund management industry. It’s a unique proposition which aims to
maximise the benefits of multi-manager investing to the full.
The idea is based on a simple,logical and compelling concept:
Take ten of the world's leading fund
managers, ask them to pick their ten 'best stock ideas' and put them
together in a single Fund.
key points at a Glance
ten world-class investment
managers five UK,five non-UK each running a 10 stock portfolio 100
stocks in total freedom to pursue their very best ideas
flexibility to hold up to 25% in cash
Why Invest in "The Best Ideas Fund"
With the Global Best Ideas Fund the investor gets
only each manager’s highest conviction stocks, true active management
and, perhaps more than any other fund, a total focus on outperformance.
The Fund is not managed with the aim of tracking or beating an index or
a collection of other funds. Royal Skandia just want each of their
managers to focus on buying stocks that they think will make money.
With the Global Best Ideas Fund, managers only hold those stocks they
really believe in or, put another way, stocks that they would invest in
themselves’. This might sound obvious, but it isn’t necessarily the case
with traditional fund management where some stocks are held simply
because they form a significant part of a market index.
This is a Fund for investors who believe in active management, who
believe in the added value that talented managers can deliver and who
believe stocks and shares offer the greatest opportunity for long-term
investment returns.
You should appreciate that there are inherent risks involved in all
types of investments, and this Fund is no exception. What you get back
will depend on investment performance and is therefore not guaranteed.
In fact, because Royal Skandia have given the managers huge flexibility
to pursue their best ideas, this Fund is likely to perform very
differently from traditional funds.
Investment Strategy
Royal Skandia have selected ten world-class managers to make up their
Global Best Ideas Fund, based on their ability, specialist expertise,
philosophy, investment process and track record. Royal Skandia believe
that very few investment groups could have built this Fund. To do so
requires exceptional fund manager relationships, such as those Royal
Skandia have developed over many years.
The Global Best Ideas Fund could not have been built using the
traditional Fund of Funds methodology and needed an entirely new
operational approach. Royal Skandia believe that this once again puts
Skandia Investment Management at the forefront of innovation. At Skandia
Investment Management, Royal Skandia do not believe that anyone can
consistently predict which industries or markets will outperform.
Royal Skandia do not believe that people can flip from oil, for example,
to gold, to India and then to Europe at just the right time and getting
it wrong can be expensive. This is why Royal Skandia don’t take such
risks. Royal Skandia do believe that talented, experienced and well
resourced fund managers can identify stocks that are likely to do well.
Royal Skandia have given the Global Best Ideas Fund a simple intuitive
asset allocation which provides a diversified investment and avoids
needless churning between countries. It also allows the managers’ stock
picking talents to shine through. Over the very long term, there is
evidence that stock markets move in line with Gross Domestic Product
(GDP). This makes sense to Royal Skandia. If an economy is growing
strongly due to technological improvement, healthy population growth,
rising education standards and prudent economic management, it seems
reasonable to assume that the country’s companies will enjoy strong
profit growth. This profit growth provides the life blood of stock
market returns as it allows companies to pay bigger dividends and
reinvest for future growth.
benefits of the Global Best Ideas Fund asset
allocation
Global diversification limits dependence on any single market.
Emphasis towards the UK suits typical UK investor.
Use of world GDP for non-UK element aligns asset allocation with
economic growth.
Annual rebalancing increases allocation to faster growing regions.
A World Class Line-up
This
Fund is designed to allow world class managers the freedom to manage
investments in a highly effective way, whilst investors have the
reassurance that the Fund is also being closely monitored by Royal
Skandia's manager research team. Royal Skandia have selected ten leading
fund managers from ten top investment houses. The UK exposure is divided
between five different managers, who have a range of investment styles -
aiming to take advantage of the best opportunities in different areas of
the market. Plus, five managers have each been selected to manage a
specialist overseas area.
Royal Skandia have selected the managers with great care and believe
each represents a good long-term prospect. However, Royal Skandia
actively monitor the portfolio with the aim of maintaining a world-class
investment line-up so, as events change over time, Royal Skandia may
change the managers and the firms selected. The past performance of a
manager is not necessarily a guide to future performance. Picking the
right fund managers using Royal Skandia's rigorous investment selection
process is what sets Royal Skandia apart. Royal Skandia have one of the
UKs largest manager research and selection teams, spending over 6,000
hours a year dedicated to researching, meeting and analysing managers
across the globe. This is something few other asset management companies
can offer.
How Might The Fund Perform ?
This Fund will perform differently from other equity funds because the
ten managers have the flexibility to back their best ideas with complete
conviction, rather than having to pick stocks to ’pad out’ the
portfolio.
There may be times when this Fund will be more conservatively positioned
than a traditional equity fund and times when it adopts a more
aggressive stance.
There will be times when it has significant exposure to smaller
companies and times when it is more focused on Blue Chips. Where
investment is in smaller companies, holdings can be more volatile and,
because they tend to be less liquid, may be more difficult to buy and
sell. Wherever our selected managers see the maximum opportunity to make
money, that is where Global Best Ideas will be.
Each manager also has the flexibility to move into cash (up to a maximum
of 25%) if they see fit. However, they will always be expected to hold
around ten stocks, because Rpyal Skandia believe there are opportunities
to make money in all market conditions. While the ability for managers
to move partly into cash could limit the risk of equity investment when
markets are falling, the return could be reduced if the Fund has high
cash exposure at a time when markets are rising.
The managers have the flexibility to change the stocks within their
portfolios as they see fit in order to maximise the growth potential of
the Fund. Some of Royal Skandia's managers will adopt a very short term
mentality, trading their portfolio hard to exploit short-term
opportunities whilst others will take a much longer term stance, seeking
stocks that they believe are very undervalued and then holding them for
years.
The Fund does not aim to compete with any specific benchmark and Royal
Skandia are prepared to back each manager’s convictions over the long
term. Therefore, it’s likely that performance will fluctuate in the
short term, perhaps markedly from other equity funds, so you should be
prepared to invest in the Fund for at least five years.
What you get back will depend on investment performance and is therefore
not guaranteed. The value of investments and the income from them can go
down as well as up. You may not get back as much as you invested.
And The 10 Managers Are ?
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