The Way Group has launched the Absolute Return Portfolio Fund, one of three new investment funds to use a new tiered performance fee structure.
Way Absolute Return Portfolio Fund follows the recently launched Way Freestyle Growth Portfolio Fund, and will be followed this month by the Way Asian Spice Portfolio Fund.
Manager Roderick Collins, founding member of Hasley Investment Management, will head up the fund.
It will invest in quoted hedge funds and investment trusts of hedge funds deploying a range of strategies as well as in some distributor status hedge funds and the growing range of absolute return funds available under Ucits III.
"The central concept of the fund is to offer a diversified portfolio of absolute return vehicles, which are not dependent on the market directional bets, which are the hallmark of long only equities," says Collins. "It is important not to rely on a single manager in the absolute return space but to employ a range of carefully selected managers, many of which will have non-correlated performance, in order to minimise portfolio volatility."
The charging structure for the fund – designed in part to reflect investor unease at fund management levies charged regardless of whether the fund has performed well or not – carries a tiered performance fee commencing at ten per cent for returns between five per cent and 15 per cent per annum. A fee of 20 per cent will be taken for growth over 15 per cent per annum.
A base annual management charge of 0.5 per cent applies to the institutional class where there is no trail commission payable to financial advisers. The retail class carries an additional charge of 0.5 per cent per annum which is paid out to servicing independent financial advisers as trail commission.
The fund is one of the growing stable of funds managed by a specialist external manager on behalf of Way Fund Managers.
“The launch of the Way Absolute Return Portfolio Fund continues our strategy of complementing our global portfolio style funds with a range of contemporary thematic funds which we believe to be relevant for the decade ahead,” says Way Group chairman Paul Wilcox.
“We have also recently launched Gold and Green Portfolio funds, which are performing exceptionally well, and the Absolute Return Portfolio Fund provides an equally compelling proposition for investors seeking steady positive ‘deposit beating’ returns.”