EUROPE - Credit Suisse Asset Management has unveiled a new open-ended fund which combines both growth and value investments.
The Luxembourg-domiciled Credit Suisse Equity Fund Style Invest Europe targets western European stocks and is managed in a two-stage investment process.
In the first stage, holdings – European companies with a market cap of at least e500m – are allocated to either a growth or a value portfolio, each of which holds up to 100 stocks. The selection criteria for the growth portfolio include the sector and the earnings growth of the stock, while for the value portfolio they include the dividend yield and price/book value multiple.
In the second stage, the optimum mix of value and growth stocks within the fund is identified. The weighting of the two styles is based on a mathematical model which is matched to an investor risk profile.
The fund actively weights one of the two investment styles at any given time, so an active position in growth or value stocks is taken at any given point in time. The weighting is automatically adjusted to market conditions and is benchmarked to the MSCI Europe ex UK.
This means that in periods when the market outlook is uncertain, the fund will have a strong investment bias towards value stocks, while in times of stability, the stock mix will favour growth companies, said Stephen Wander, head of European retail marketing.
“Investing in this fund is a way to make targeted use of European equity market trends without having to commit to just one investment style,” he said.
Wander added that some pension funds with an appetite for niche products have made initial enquiries but declined to give details .
Currently the fund is registered in Luxembourg and Switzerland. But Wander said there plans to launch it throughout continental Europe - including France, Germany, Italy, Netherlands, Norway, Spain and Scandinavia - over the coming months. The fund is not open to UK investors.
Wander added that an initial B share class has been launched with no minimum investment level. But an institutional class can be opened on request which carries a minimum subscription of e3m and is subject to certain investor restrictions.
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