F&C Overseas Equity-Linked UK Inflation Fund Class 3

Specialist

Rated Fund 2017-2018. Uses a liability-driven investment approach.

This fund uses an approach popular with institutional investors, known as liability-driven investment. The aim of the approach is to enable investors to hedge their liabilities, which would normally involve investing wholly in government and corporate bonds, while still providing exposure to equity market returns.This fund is managed by Alex Soulsby, head of liability-driven investment at BMO Global Asset Management. The objective of the fund is to provide growth through a combination of overseas equity exposure and an investment in inflation-linked UK government bonds and cash. The index-linked gilts exposure is predominantly to bonds with terms of five years or more.The fund is structured such that 30 per cent is held in cash or high-quality money market instruments and the remaining 70 per cent is invested in inflation-linked gilts. In addition, it aims to provide 100 per cent exposure to equity returns using equity futures. Any margin calls on the equity futures arising as a result of underlying equity market movements are funded from the cash or near-cash holdings.The equity overlay is achieved by investing in a well-diversified basket of overseas equity futures with an asset allocation of 34 per cent Europe (Eurostoxx 50), 33 per cent US (S&P 500 index futures), 17 per cent Japan (Topix), 8 per cent Hong Kong (Hang Seng) and 8 per cent Australia (ASX 200).The government bond portfolio is also managed on a passive basis to match an index of inflation-linked gilts of over five years to maturity. The fund is rebalanced monthly to return the asset allocation to the target weights.

Narrative and ratings content all as of 01 January 2018.

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Name
F&C Overseas Equity-Linked UK Inflation Fund Class 3
Manager
BMO (F&C Management Ltd)
Type
Open Ended Investment Company
ISIN
GB00B4NVY384
Sector
Specialist
Launched
07/12/2009
OCF
0.35 %
Risk Rating
5
3 Year Sharpe
0.91
Yield
0.1 %
Benchmark
Hang Seng HSI TR USD
The Fund aims to combine overseas equity exposure with investment in UK government securities with some cash. The Fund will invest predominantly in over 15 year gilts with approximately 25% in cash (comprising deposits, commercial paper, certificates of deposit and short dated gilts with a maximum three months to maturity). The overseas equity exposure will comprise exchange traded futures on the following indices (with target weightings): 1/3 S&P500, 1/3 Euro stoxx 50, 1/6 Topix, 1/12 ASX200, 1/12 Hang Seng.
Holding %
United Kingdom of Great Britain and Northern Ireland 1.25% 4.33 %
United Kingdom of Great Britain and Northern Ireland 0.38% 3.94 %
United Kingdom of Great Britain and Northern Ireland 0.12% 3.89 %
United Kingdom of Great Britain and Northern Ireland 1.12% 3.59 %
United Kingdom of Great Britain and Northern Ireland 0.5% 3.57 %
United Kingdom of Great Britain and Northern Ireland 0.75% 3.54 %
United Kingdom of Great Britain and Northern Ireland 0.62% 3.50 %
United Kingdom of Great Britain and Northern Ireland 0.12% 3.38 %
United Kingdom of Great Britain and Northern Ireland 0.62% 3.35 %
United Kingdom of Great Britain and Northern Ireland 1.25% 3.26 %
Region %
Sector %
Name
BMO (F&C Management Ltd)
Address
United Kingdom
UCITS
Yes
Legal Structure
Open Ended Investment Company

Managers

Alex Soulsby
Joined 12/07/2009

Alex Soulsby is a Derivatives Fund Manager in the Asset-Liability Management team, joined F&C in July 2006. Prior to joining F&C he worked at JPMorgan where he spent 8 years as an interest rate specialist, modelling exotic derivatives and subsequently marketing to UK financial institutions. Alex has a BSc in Economics from LSE and a BA in Philosophy and Politics from the University of Durham.

Data provided by Morningstar.

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