T.Bailey caps TER at 0.99% on passives fund

Growth fund LITE will invest globally in ETFs and trackers and mirror the asset allocation of the group's actively managed vehicle.

The asset allocation at launch will be: UK 25%, US 25%, emerging markets 17.5%, Europe ex UK 15%, Japan 7.5% and Pacific Basin ex Japan 10%.

Chief investment officer Jason Britton and Elliot Farley will manage the new vehicle in addition to their mandate on the £160m Growth fund, the template for the new passive offering. It has delivered top quartile performance since its launch 10 years ago, according to Lipper.

"Passive investing is more complex than is often credited - over the long term many trackers seriously underperform the index they are following, then there are issues of cost, risk and, of course, the challenge of building a sensibly balanced portfolio," Britton says.

"It is not surprising that many investors just opt for a FTSE 100 tracker. But then they end up with more money in Cadburys or British Airways than in emerging markets. This fund is groundbreaking in that it offers the performance and risk benefits of active portfolio management and the cost savings of passive investing."

Growth fund LITE is still awaiting FSA approval but T.Bailey hopes to launch the vehicle later this month.

Categories: Passive Managed

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