James Williams, news editor, Hedgeweek

Dodge & Cox Worldwide Funds plc joins Ascentric Wrap Platform, UCITS attract EUR24billion in net inflows for August…

Swiss-based Pharus Management has launched Pharus Management Luxembourg SA to manage UCITS compliant SICAVs, specialized investment funds and alternative funds under the Alternative Investment Fund Managers Directive, reported Investment Europe this week.

Funds wishing to take advantage of the European passport will either have to implement complex control mechanisms or outsource them to a management company. Pharus Management Luxembourg, which will target existing SICAVs as well as alternative funds with at least EUR100million in AUM, will act as manager, sponsor, risk manager and distributor. It will also incorporate Pharus SICAV, which manages a suite of 18 funds running approximately EUR210million in assets. Davide Pasquali, deputy chairman at Pharus Management SA, was quoted as saying: “Looking ahead, asset managers will be increasingly forced to hire an independent management company, as the complexity of investment portfolios and management strategies has increased. This would also reduce conflicts of interest.” 

It seems that the ECB’s commitment to protect the euro reassured investors in August. This week, the European Fund and Asset Management Association (EFAMA) published its latest Investment Fund Industry Fact Sheet for August, reporting that net inflows of UCITS totalled EUR24billion: a significant jump on July, which recorded EUR6billion. The main reason for the increase was due to a turnaround in the net sales of money market funds: they attracted net inflows of EUR11billion, a marked reversal on July that saw net outflows of EUR18billion.
 
Bond funds continued to record strong net inflows (EUR18billion), despite being slightly down on July (EUR24billion). Equity funds enjoyed their fifth consecutive month of net inflows in August, attracting EUR10billion. On aggregate, total net assets of UCITS increased by 0.3 per cent in August to EUR6.2trillion.
 
Commenting on the figures, Bernard Delbecque, Director of Economics and Research at EFAMA, said: “The ECB’s commitment “to do whatever it takes” to preserve the euro assuaged investor concerns during August, which supported net inflows to bond funds. However, investors continued to shy away from equity funds in the midst of mixed signals about the global economic outlook.”
 
Hermes Fund Managers this week announced the launch of its latest UCITS fund, which will invest predominantly in UK inflation-linked bonds. The Hermes UK Active Inflation-Linked Fund is managed by a team of five investment professionals headed up by Penni Coe, Head of Hermes Global Government and Inflation Bonds. Hermes has been managing UK index-linked bonds since 1986. The fund will aim to deliver performance via the deployment of active management tools, interest rate risk, maturity selection, and tactical investments in both conventional bonds and overseas government inflation bonds.
 
A minimum of 60 per cent of the fund’s portfolio will be invested at all times in UK government index-linked bonds. Coe said that while UK inflation looks to have temporarily peaked, “it remains stubbornly high”, and that the long-term of QE, and high commodity and utility prices offered little reason to believe “it will fall below the Bank of England’s 2 per cent target on a consistent basis”.
 
Added Coe: “For investors, buying inflation-linked bonds remains one of the best ways to protect against the effects of future inflation. The effects of QE and uncertainty over revisions regarding how the Retail Price Index is calculated have seen index-linked Gilts underperform their conventional peers in recent months. Resolving the uncertainty over RPI looks to be on track for early 2013. That, together with the recent underperformance compared to conventional Gilts, presents an attractive buying opportunity, especially with long-dated real yields close to their highest levels of the year.”
 
San Francisco-based Dodge & Cox, one of the largest privately owned investment advisers in the world founded in 1930, announced this week that Dodge & Cox Worldwide Funds plc, organised as an Ireland-domiciled UCITS, was recently added to the independent Ascentric Wrap platform.

The Ascentric Wrap platform, launched by managing director Hugo Thorman in January 2007 before being acquired by life company Royal London in October 2007, is available exclusively to financial advisers and offers a fully integrated online investment management and dealing platform. The platform allows advisers to select investments from a wide range of investment vehicles for private investors. Dodge & Cox Worldwide Funds will join the lineup of approximately 3,500 other funds available for advisers on the platform.

Managed by Dodge & Cox Investment Policy Committees, the Dodge & Cox Worldwide Funds consist of three UCITS funds: Global Stock Fund, International Stock Fund, and US Stock Fund. Commented Kenneth Olivier, chairman and CEO of Dodge & Cox: “We are delighted to be included as an option on the Ascentric platform. As we build our UCITS business, financial advisers, as they do in the United States, will play an important role in educating individual investors about our funds.”

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