T Bailey to launch new actively managed passive fund

Fund of funds specialist T. Bailey is to launch a ground-breaking, passive-only equity fund. The new multi-manager fund, which will include an international mix of tracker funds and ETFs will be actively managed by T. Bailey and is expected to have one of the lowest TERs for a fund of funds in its sector.

T. Bailey's Head of Marketing and Communications, Philippa Gee, said: "We have long been concerned at the risks many fans of trackers are taking - too many invest in a FTSE 100 tracker simply because it is cheap. They are missing out on the growth opportunities in emerging markets and other regions."

She said the new vehicle would be a carefully constructed fund of passive funds, actively managed on a daily basis to enhance returns and reduce risk.

"It's a pioneering, RDR-friendly fund. It will offer active overlay and passive underlay - providing a cost-effective solution for those IFAs who favour passive investing but recognise the need for active asset allocation."

Gee said the fund would also deliver expert selection. "Trackers need to be chosen with care. Many underperform the index they are tracking; many cost more than they should; some are more complex than they seem on the surface; issues of counterparty risk need to be considered too."

T. Bailey is now in the final round of launch discussions with the FSA and is expected to announce further details of the fund, including TERs, in the New Year.

Gee added: "It will be incredibly competitive."