Both funds are linked to the Barclays FTSE 100 Trend Total Return Index, which adopts a rules-based approach to asset allocation. The first step identifies if the market is in a positive trend, a negative trend or neither, the fund then subsequently assesses market volatility in order to define the level of exposure to the underlying index via either a long or a short position. If no trend is identified the fund allocates to cash.
The IFSL Barclays FTSE 100 Trend Fund uses a smart stop feature that aims to protect against market falls – a defensive allocation to cash is triggered if the index falls by 2.5% or more over a five business day rolling period.
The IFSL Barclays FTSE Protector 80 Trend Fund, meanwhile, allocates between the strategy and cash depending on market conditions; the fund is run with the overall goal of protecting 80% of the highest ever NAV price.
“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,”said Richard Henry, director, investment solutions at Barclays Wealth.
Barclays says the Trend 100 fund has delivered a return of 10.6% since its launch in September 2010, with the Trend 80 Fund delivering a return of 8.8%. The UK-domiciled funds have an AMC of 1.15% each.
“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,” said Bryan Parkinson, director of UK IFA distribution at Barclays Wealth.
