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Innovation at Skandia By Jeff Salway
Last summer, the launch of a new, unique fund from Skandia received a mixed reception. The Skandia Global Best Ideas fund was simple and obvious, incorporating the 10 best stock ideas of 10 of the best fund managers With managers including Angus Tulloch of First State and Aberdeen's Hugh Young, there was no shortage of respected names that investors and advisers would be familiar with. But, while the idea seemed straight-forward on paper, many experts felt the concept was flawed, while the heavy charges - covering both Skandia and the underlying managers - also attracted criticism. However, it has achieved 30% growth in the first year, compared with 18% for its peer group. There were concerns about how rigid the asset allocation would be with 10 managers covering defined areas, but Philippa Gee, investment director at IFA Torquil Clark, reckons the fund's success is revealing. "It shows that managers have a group of core stocks in which they really believe, and that these best ideas can be diluted in their own funds when they have to invest in dozens of other stocks too." Are there more to come? So, can investors expect to see more of these funds developed? Skandia has since launched a UK version, while boutique Rensburg has launched a UK Managers' Focus Trust, where four of its own managers run 25% of the portfolio each. But the chances of other fund groups jumping on the bandwagon are slim, says Gee. "Skandia has very good managers on board - and there aren't that many good ones around." Some providers are talking about similar models, utilising the best ideas of a small group of fund managers, but nothing is likely to be unveiled until later this year.
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