The F&C European Small Cap ex-UK fund is comprised of between 40 and 60 stocks and, unlike the other funds in the range, the exposure to UK equities has been removed.
It is an ex-UK onshore version of the asset manager’s Luxembourg-domiciled European Small Cap SICAV, and will be managed by Sam Cosh, who also runs F&C’s European Assets Trust.
The new fund will invest in the smallest 25% of companies within the European market. F&C said everything else in the portfolio has remained the same as its pan-European SICAV, “but the remaining portfolio has been rebalanced to provide data as though the portfolio never held UK equities”.
“Lack of talented fund managers”
During a roundtable, the head of UK sales for F&C investments, Rob Thorpe, said: “There is a lack of talented fund managers running funds that are ex-UK, but there’s not a lack of demand.
“It was clear from our ongoing conversations with clients that there is an appetite from UK investors for European small caps.
“It was a natural step for us to enhance our existing range in order to meet client demand.”
The fund will have an annual management charge of 0.75% in the clean share class, as well as a founders’ share class, which offers a lower price for those investors contributing to the first £50m, a capacity which Cosh said has almost been filled.
He said the fund’s biggest exposure would lie in financial companies because “it’s not an expensive area” and presents some good businesses opportunities.
Thorpe said they don’t currently hedge but “are looking at introducing a hedge class” if there is a demand from clients.
