Protected funds face revamp to comply with RDR rules
Investec Asset Management has had to resort to a unique move to give advisers access to one of its funds ahead of the RDR, launching a second version of its Multi-Asset Protector (MAP) product.
The move suggests that all other funds that offer an explicit capital guarantee – potentially the whole IMA Protected sector of 42 funds, in which the Investec fund is situated – could be forced to follow suit to comply with the FSA’s RDR rules.
David Aird (pictured), managing director for UK distribution at Investec, said: “Unlike other funds that have different classes with different share prices, MAP can only have one class because the protection level cannot depend on more than one share price.
“With [the] RDR around the corner, platforms have requested a clean share class, and MAP2 was launched specifically for those platforms. MAP and MAP2 are similar in all other respects.”
The £390.8m MAP fund, run by Philip Saunders and Max King, launched in January 2009 and has delivered a top-quartile 13.9 per cent over three years to August 1 compared with the IMA Protected sector average return of 11.2 per cent, according to FE Analytics.
The RDR-ready share class on MAP2 carries an annual management charge of 0.8 per cent, the group said.
Mr Aird added that the strategy’s protection levels are currently 86.2 per cent for MAP and 80 per cent for MAP2, primarily because the funds were launched at different dates.
Investec announced in May it would use completely ‘clean fee’ share classes, levying annual fees of 0.75 per cent a year, for its entire fund range. The group said investors buying the funds using those share classes would be able to expect total expense ratios of between 0.84-0.87 per cent.