Sterling Investments' flagship fund has "finally arrived in the 21st century", with the removal of its entry fee and dual pricing structure, alongside a name change, Investment Week can reveal.
The MI Discretionary Unit Trust has been renamed the MI Sterling Select Companies fund, while the £43m fund, which was launched in 1963, has also had its longstanding entry fee scrapped, along with its bid and offer pricing, with it moving to a "simple, NAV-based single-price" structure.
The fund's manager and founder of Sterling IM Melwin Mehta told Investment Week he hoped the new name would "convey that we are selective", as the firm attempts to broaden its appeal from mainly retail investors, to encompass wealth manager and IFAs.
"We want to convey to them our unique process," Mehta said. "We do not just look at valuations; we do not just want to buy the cheapest stocks in the market.
"We are really putting a lot of weight on management. We meet 250 management teams per year and invest in five to ten ideas at best - we reject 98% of the companies.
"Therefore, using the word 'Select' demonstrates we are really being selective in the process." The fund currently holds 38 small-cap companies. "If you have hundreds of names, investors might as well buy an index."
On the removal of the entry fee and dual-price, Mehta conceded both "should have been removed ages ago", declaring: "Finally we have arrived in the 21st century."
The manager said the firm had "removed the disadvantages of people investing in our fund". "Now they do not incur a financial loss for investing."
At the portfolio level, Mehta said he had been "sticking to quality". "It is very tempting to buy cheap stocks, but what is important is to buy solid companies that are going through temporary problems because they will come back on the other side," he said.