Growing M&A activity in the UK market now threatens the ability of unit trust managers to find neutr...
Growing M&A activity in the UK market now threatens the ability of unit trust managers to find neutral or overweight positions against the largest five stocks in the index. The Vodafone-Mannesmann merger took Vodafone Airtouch well past 10% of the FTSE 100, whereas under Ucits, unit trust managers can hold no more than 10% of a portfolio in a single stock. However, fund managers are now in danger of coming up against a second Ucits rule designed to encourage portfolio diversification. The rule dictates that with no more than 10% in any one stock, the top four can not make up more than 40%...
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