According to Simon Brazier, its manager, the portfolio was seeded with capital from a continental European client and is expected to grow significantly over the next three months.
The fund employs the same conviction-driven process that Brazier, the head of UK equities at Threadneedle, has used on the firm’s £1.1bn British-domiciled UK Oeic he took over in April 2010.
According to FE Analytics, the onshore fund has performed well in relative terms, falling by just 0.18% over the 12 months ending 5 Dec, against an average decline of 2.66% in the Investment Management Association’s UK All Companies sector – enough to take it into the first quartile.
Longer-term performance is also strong. Over the past five years, the portfolio outstripped the sector average by more than ten percentage points, in sterling terms.
The Luxembourg-domiciled portfolio holds 50-90 stocks and aims to be broadly diversified, by market capitalisation and sector. Threadneedle describes the strategy as “index aware but stock unconstrained”, although individual position sizes will be no greater than 5%.
‘Great appetite’
According to Brazier, the fund should appeal to UK offshore investors, in addition to those based in Latin America, the Middle East and continental Europe.
“We have spoken extensively to our clients and they have indicated a great appetite for a product that will capitalise on the UK investment market in this form and will enable a broader range of investors to access our expertise in UK equity investing," he said.
“Valuations of UK equities are currently compelling and many companies are in good health with strong balance sheets. Our bottom-up approach to stock picking should serve us well against this backdrop.”
The retail share class of Threadneedle UK Equities has a minimum investment limit of £2,000 and a 1.5% annual management fee. The fund has currency-hedged euro, Swiss franc, Singapore dollar and US dollar share classes, although registration is pending in these regions.
