Investing across equities, fixed interest, property and cash, the four multi-manager funds are managed by Chris Metcalfe, the co-founder of IBOSS Limited, and will use the same investment process as the team uses in its existing model portfolio offering.
Asked why the firm chose to expand into a range of OEICs, Metcalfe explained that the new range is a natural progression from the current model portfolio service. But, he was quick to add that while the investment process is the same, there is very clear water between the two companies from a compliance standpoint.
Metcalfe is supported on the funds by Chris Rush and Michael Heapy as senior investment analyst and analyst respectively.
Risk ratings
Sitting in the IA Unclassified sector, MGTS IBOSS 1, MGTS IBOSS 2, MGTS IBOSS 4 and MGTS IBOSS 6 are named after the risk level targeted and are all non-UCITS retail schemes. They have a minimum investment of £1,000 as a lump sum or £100 through regular savings.
According to the firm, MGTS IBOSS 1 uses the IA Mixed Investment 0-35% Shares sector as its benchmark and launched with 35% in equities, 28% in fixed interest, 5% in property and the remaining 32% in cash. It has an OCF of 1.1%.
MGTS IBOSS 2 fund, benchmarked against the IA Mixed Investment 20-60% Shares sector, held at launch 46% in equities, 29% in fixed interest, 7% in property and the rest in cash. Its has an OCF of 1.22%.
With 65% in equities, 24% in fixed interest, 7% in property and 4% in cash, MGTS IBOSS 4 fund is benchmarked against the IA Mixed Investment 40-80% Shares sector.
It has an OCF of 1.32%.
The fourth fund, MGTS IBOSS 6 has an OCF of 1.36% and is benchmarked to the IA Flexible Investment sector. At launch it had 76% held in equities, 15% in fixed interest, 7% in property and 2% in cash, the firm said.
Diversification
Each of the funds will have around 35 – 40 holdings, Metcalfe said, as the firm has found over time that individual manager risk is underplayed and so prefers to have more diversification than others.
In order to ensure this, each fund is subject to a maximum initial holding of 4% and a minimum initial holding of 2%, Metcalfe said.
And, where possible “multiple funds are held in different sectors as no fund manager can get it right every time”.
While the firm is happy to invest in passive funds, there is currently little exposure to them.
“We do have an investment in the L&G UK tracker at the moment,” Metcalfe said, explaining that in a situation where there is a significant risk-off move where the baby is thrown out with the bath water, passives enable a quick move into the market.
According to IBOSS it also tends to avoid single country funds, such as India or China, which it says, “limit a fund manager’s ability to negotiate through difficult economic trends. “This may be particularly relevant where difficulties exist in one country but do not necessarily extend to the whole region,” he added.
The funds launched on 8 February.
