UK - Standard Life Investments has launched a UK small and mid cap equity fund, targeting both retail and institutional investors, called the UK Opportunities Fund.
The fund will invest in stocks from companies with a market capitalisation of between 10 million pounds (15.8 million euros) and two billion pounds (3.2 billion euros). Says the fund’s manager, Mark Niznik: “While there will initially be a roughly 50:50 split between FTSE 250 stocks and FT Small Cap (or smaller), allocation will be driven by the relative merits of the underlying companies.”
Fundamental analysis of UK companies outside the FTSE 100 will be used to maximise long-term returns.
Niznik believes that the prolonged fall in UK stocks makes now a “perfect time to launch a fund with small and mid cap stocks on unwarranted discount valuations”. Niznik disagrees that the UK economy is heading for a hard landing, or that interest rates will rise sharply, in which case the 25% discount valuation that smaller companies historically have in comparison to the UK’s larger companies is unwarranted.
The FTSE all share index, ex-FTSE 100 companies will be used as a benchmark for the new fund. In terms of fees, a one-off initial charge of 3.5% and an annual management charge of 1.5% will be made.
Niznik also manages two pension funds for Standard Life Investments, having joined the company in April. Prior to that, he worked at Invesco for nine years managing the Invesco Perpetual Global Smaller Companies Fund.
Standard Life Investments runs 17 OEIC, or open ended investment company, funds, and has 80 billion pounds (126.4 billion euros) in assets under management.