Barclays Wealth launches Trend Funds to retail market
Barclays Wealth Investments announces the launch of the IFSL Barclays FTSE 100 Trend Fund and the IFSL Barclays FTSE Protector 80 Trend Fund to the retail market in response to investor demand. Both Funds aim to deliver positive, stable returns in a wide range of market conditions, using a dynamic rules based investment approach which aims to benefit investors in both upwards and downwards market trends.
The Funds represent a cost efficient solution for those investors seeking a low-volatility UK equity investment with an absolute return overlay. In comparison to some of its competitors, the Funds do not charge a performance fee.
Both Funds are linked to the Barclays FTSE 100 Trend Total Return Index which adopts a straightforward, rules-based approach with three key steps. The first step aims to identify if the market is in a positive trend (market trending upwards), negative trend (market trending downwards) or if no trend is discernable. Once a trend is identified the second stage is employed whereby the Fund examines market volatility and defines the level of exposure to the underlying index within a range of 0-100%. In a positive trend the Fund will take a long position in the Index (the FTSE 100 Total Return Index) and in a negative trend the Fund will take a short position. If no trend is identified or markets are too volatile the Fund allocates to cash.
The final stage is specific to the individual Funds. The IFSL Barclays FTSE 100 Trend Fund employs a smart stop feature which aims to insulate investors from significant market falls. A defensive allocation to cash is triggered should the Index experience a fall of 2.5% or more over a five business day rolling period. This pre-set allocation rule aims to reduce downside risk in extreme market scenarios.
The IFSL Barclays FTSE Protector 80 Trend Fund will appeal to more cautious investors. This Fund employs a technique whereby it allocates between the strategy and cash depending on market conditions. Therefore if market conditions are favourable, the Fund will tend to increase exposure to the strategy and less to cash - and visa versa. Ultimately the Fund is run with the objective of protecting 80% of the highest ever NAV price.
Richard Henry, Director, Investor Solutions, Barclays Wealth comments: "Particularly at this time of market uncertainty, with the equity markets moving sideways, investors are rightly observing that committing to a long-only strategy is not without its risks.
"The Trend funds are ideal for investors seeking core UK Equity exposure. Their potential to deliver stable, positive returns whether the market direction is upwards or downwards make for an attractive proposition as markets continue to exhibit uncertainty.
"With its 80%-of-highest-NAV daily protection, the Protector 80 also has additional appeal to the more cautious investor albeit with the ability to lock in future gains."
Bryan Parkinson, Director of UK IFA Distribution, Barclays Wealth comments: "The launch of these Funds marks our ongoing commitment to expanding our funds range into the intermediary market, following the launch of the Global Markets range last year. We have seen ongoing demand for this type of product, as intermediaries are faced with increasing challenges, in particular the impact of RDR and also as the demand for absolute return vehicles increases amongst retail investors in response to disappointing market returns. Intermediaries are seeking ways to manage these issues through lower cost, higher value investment vehicles"
Since launch, the Trend 100 Fund has delivered a performance of 10.6% and the Trend 80 Fund has delivered a performance of 8.8%. The AMC, including annual adviser commission, for the funds is 1.15%. The Funds are currently available on a variety of platforms, including Cofunds, Axa Elevate, Ascentric, Transact and Nucleus. The Funds are structured as an OEIC and are UK domiciled.