UK - Merrill Lynch Investment Managers has launched its first pooled focus fund, which is specifically aimed at pension funds and charities.
The Merrill Lynch Institutional Trust UK Focus Fund will invest solely in stocks that the fund manager has a high conviction will perform and which takes no account of index weightings.
The fund will typically invest in 15-20 stocks to maximise total return. Fees will be a combination of base and performance fees.
MLIM head of equity products Charles Prideaux said: “Historically, clients have measured performance and risk against a generic index.
This meant an active manager was not in a position to deviate significantly from the index weightings in order to restrict volatility of returns relative to the benchmark.
“However, with clients moving to liability-specific benchmarks and using total risk budgets to determine risk allocations, equities can now take their proper role as an alpha-generating asset class.”
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