James Williams, Hedgeweek

Brooks Macdonald Funds Ltd launches first actively managed property UCITS fund… Ireland welcomes first ETF to invest directly in China’s A-Shares equity market…

Brooks Macdonald Funds Ltd (BMF) this week announced the imminent launch of the IFSL North Row Liquid Property Fund, believed to be the UK’s first actively managed UCITS core property fund. The fund is expected to launch in February and will be managed by Steven Grahame. He will be supported by Dr. Niall O’Connor as deputy fund manager.

The IFSL North Row Liquid Property Fund will offer investors liquid exposure to the global real estate markets by investing mainly in property derivatives, as well as property equity and debt, to gain exposure to direct property markets. The open-ended fund will aim to deliver a high correlation to direct property markets, targeting a high income yield of 4.5 per cent to 5.5 per cent with low volatility.
 
To enhance total returns, the fund will be actively managed using a fundamental and quantitative research process to identify mis-valued markets, identifying mis-valuations between property debt, equity and direct markets, while measuring and controlling risk via BMF’s own risk management process.
 
The fund has daily dealing, no performance fee, no entry/exit fee and has a significantly lower total expense ratio than directly invested funds available on the market.
 
Simon Wombwell, CEO of Brooks Macdonald Funds, said: “The IFSL North Row Liquid Property Fund is a unique and innovative concept which we are excited to be bringing to investors. It is the first UCITS property fund of its kind, and offers a unique opportunity to invest in property through assets with daily liquidity, rather than slower-moving bricks and mortar.” Added Grahame: “Today’s improving economy provides a positive outlook for property, which we believe should be at the top of investors’ wish lists for 2014.
 
“Our approach in identifying relative value across property asset classes allows us to actively manage whilst avoiding the costs and delays in transacting physical property. We believe professional investors have long wanted an efficient way of managing their exposure to property. As the first UCITS core property fund our launch couldn’t be better timed.”
 
The Irish Funds Industry Association has welcomed the launch of the first Exchange Traded Fund (“ETF”) to offer European investors access to the China A-Shares equity market. ‘A shares’ refer to the shares of China-based companies that trade on mainland stock exchanges such as the Shanghai Stock Exchange.
 
The Irish-domiciled CSOP Source FTSE China A50 UCITS ETF invests directly into the China A-Shares market under the Renminbi Qualified Foreign Institutional Investor (“RQFII”) quota scheme. It opens up an exciting opportunity for both retail and institutional investors seeking direct access to one of the worlds’ most important equity markets.  
 
Commenting on the launch, Pat Lardner, CEO of the Irish Funds Industry Association said: “This is another significant milestone for the Irish funds industry. It is also a clear demonstration that Ireland and its funds industry remains ahead of the curve when it comes to enabling investment firms to broaden their distribution reach through innovative, well-structured and efficient products.” 
 
Ireland is already the leading European domicile for ETFs representing approximately 32 per cent of the overall market, servicing over EUR62billion of the EUR195billion European ETF market. Ted Hood, CEO of Source added: “Ireland is a natural home for this innovative, new product due to its reputation for regulatory excellence, world-class service levels and expertise in ETFs. Ireland's pre-eminence as a jurisdiction for exchange traded funds has helped support Source's rapid growth from start-up to one of the ETF industry leaders.”
 
ING Investment Management International announced this week that it had launched a retail version of the firm’s seven-year old European Sustainable Equity strategy. The institutional strategy has quadrupled in the past two years. The launch of a retail version of the strategy highlights the growing demand for sustainable investments. The ING (L) Invest Europe Sustainable Fund invests in a portfolio of sustainable stocks combining risks and opportunities linked to environmental, social and governance factors. The new UCITS-compliant fund is domiciled in Luxembourg and launched with around EUR40million in assets. It is available to retail and institutional investors across Europe and Asia.
 
Hendrik-Jan Boer, head of sustainable investments at ING IM, was quoted as saying: “We believe that now is a good time to invest in European equities and we feel that sustainability is an important value driver. It is the key factor in identifying corporate quality. Academic and market research increasingly demonstrate that attention to the quality of environmental, social and governance factors can boost corporate profitability and competitiveness and thus the return of equity portfolios as well.”
 
The fund aims to outperform the MSCI Europe Net Index by 2 per cent per annum

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