Legal & General retail investments enters absolute return sector

Legal & General will enter the Absolute Return sector with the launch of a new fund, The Diversified Absolute Return Trust (DART) on November 10. DART will be managed by David North, Head of Asset Allocation at Legal & General Investment Management, and is the latest addition to its £30bn multi-asset range.

DART provides the retail investor with access to investment techniques that have previously only been accessible to pension funds, institutions and hedge funds.

David North said: "The turmoil in financial markets is changing investors' expectations of risk and return. Many investors, while not risk averse, are seeking to protect downside risk while seeking capital gains. DART is designed to harness investment opportunities across a broad range of asset classes using derivatives and cash instruments under UCITS III regulations.

Investors can now benefit from macro fund management techniques that may not have been accessible historically. This approach to asset management offers investors the potential for equity like returns but without the volatility associated with traditional equity investment."

DART will principally invest in derivatives including index futures and currency forwards, and other "Over the Counter (OTC)" instruments that provide exposure to a wide range of assets across all markets and currencies. In addition, DART will use derivatives to actively mitigate risk. The Trust may also invest in collectives, equities, securities, money market instruments and cash.

Legal & General's Sales Director (Retail Investments), Ben Waterhouse said: "David North is widely recognised as one of the finest asset allocators in the UK. DART is the natural evolution of our £30 billion multi-asset fund range. At a time when investors are exceptionally risk conscious we expect an absolute return approach to asset allocation to be very popular."

The fund's aim is to provide positive returns in all market conditions. The performance objective is to provide a positive return over the short term (on an annual basis) and to outperform equities (measured against the FTSE All Share Index) using three-year rolling periods.

Investment is available as an ISA, for ISA transfers and direct investment in the Unit Trust. The minimum investment is £500. For the 2008/2009 tax year the maximum investment in an ISA is £7,200. There is no limit for ISA transfers and direct investment in the Unit Trust.

The initial charge for retail investors is 5 per cent and the annual management charge is 1.5 per cent (deducted from income). There is no initial charge for institutional investors with a minimum £100,000 to invest and the annual management charge is 0.75%.

DART pays a commission to advisers of 3 per cent of the sum invested plus 0.5 per cent trail (no commission payable on switches from existing Legal & General investments). No commission is payable for investments made into the Institutional Unit Class.