This is a change from its current benchmark of the FTSE Index Linked Gilts over 5 years.
The official line from the company is the move will be made because “the benchmark better represents what the fund aims to achieve for investors and that the Retail Price Index is a more widely recognised measure of inflation”.
According to a spokesperson for Kames Capital, the manager of the £250m Kames Inflation Linked Fund, Scott Jamieson, will run the fund in virtually the same way under Ucits IV rules and regulations. He took over the fund from Stephen Jones on 1 June this year and will broadly maintain the same holdings, with the benchmark being the only material change.
As at the end of September, 44.4% of the fund was in index-linked government bonds (largely a mix of UK gilts and US treasuries), 27.5% in equity market futures, 24.7% in global equity income stocks and 23% in interest rate swaps.
The spokesperson confirmed the reason for the move as, in part, to make the fund easier to explain to investors given their knowledge of the Retail Price Index compared to their general lack of understanding of what the FTSE Index Linked Gilts over 5 years index is.
Until 1 November it will remain in the IMA Mixed Investment 0-35% sector before moving to the IMA Specialist sector.
