Quilter Cheviot has launched eight funds for use as building blocks in its model portfolio service (MPS).
The group said using the funds to construct its seven-strong MPS range will lower costs while offering a wider range of investment options to clients.
Quilter Cheviot’s MPS is available to investors with £25,000 or more to invest. It comprises global growth, growth, balanced, global income, income, conservative and cautious portfolios and until now, has predominantly invested in external funds.
From Monday, the MPS range will be built using the new underlying funds, managed by Quilter Cheviot head of MPS Simon Doherty (pictured left, above) and deputy head of MPS Antony Webb (pictured right, above). The range includes two fixed interest, four equity (North America, UK, Europe, and Asia and emerging markets), and two alternatives (see list below).
Eight ‘building block’ funds
- -MI Quilter Cheviot Conservative Fixed Interest Fund
- -MI Quilter Cheviot Fixed Interest Fund
- -MI Quilter Cheviot UK Equity fund
- -MI Quilter Cheviot North American Equity fund
- -MI Quilter Cheviot European Equity Fund
- -MI Quilter Cheviot Asian and Emerging Markets Equity fund
- -MI Quilter Cheviot Diversified Returns fund
- -MI Quilter Cheviot Alternative Assets fund
The funds will use a combination of direct equities and bonds, and external funds from third-party providers, including open- and closed-ended vehicles.
The developed equity and fixed income funds will be constructed using predominantly direct equity recommendations from Quilter Cheviot’s 10 equity analysts, while the Asian and emerging markets fund will be made up of solely external funds.
Doherty said the use of direct equities and bonds is not typically available to other MPS solutions, but it makes decision making nimbler and cuts headline costs for clients.
“This is enabling us to obtain access to a broader array of investment opportunities than is traditionally available when solely allocating to external fund managers, ” he told Portfolio Adviser.
Quilter Cheviot is not charging a management fee and expects a reduction in the weighted ongoing charges figure (OCF) of between 30% and 40% depending on the strategy.
“These [funds] are very much seen as structures to facilitate the investment management of the strategies rather than an additional source of revenue for Quilter Cheviot; that is not the focus here,” added Doherty.
