Mattioli Woods has launched a structured products fund in a bid to offer investors lower-cost, straightforward access to a wider array of products
The fund will enable clients to buy and sell the products as easily as they would do with ordinary shares.
Mattioli Woods has also pointed to what it describes as a range of other benefits compared with traditional structured product investing. First, the assets of the fund are secured by government bonds as opposed to an individual bank supplier of a product. Second, investors will have continuous access to a structured product investment, rather than having to commit to buying during a pre-launch sales period.
The portfolio, which would take “more than a year to put together” manually, according to the wealth manager, will also have lower charges than typically seen for individual plans. Exact costs have not been disclosed, but chief executive Ian Mattioli said the company expected cost savings for clients to be significant.
Launched at the end of November, the fund was developed with German bank Commerzbank. It is overseen by a pair of investment advisers, responsible for creating the portfolio. A separate structured product fund committee has independent oversight of the fund and will periodically review risks and returns.
Structured products are a divisive subject – even by financial services’ standards. For those that do believe in their merits, the Mattioli Wood fund looks like a decent prospect.
Part of the motivation behind the launch was to lower the time taken to administer the plans – a problem for clients with a lot of individual plans as well as the company itself. The wealth manager provides the example of a client with £380,000 spread across 40 holdings. The burden of administering these plans individually will be removed by the new service.
Producing a cheaper way to access a number of different products also looks attractive, as does the ability to invest in the product more flexibly.
So it is unsurprising that interest from the company’s existing customer base has been healthy – the fund raised £40m in its first four days at the back end of 2016.
For now, the fund is only available to Mattioli Woods clients, but the firm has hopes of opening it to the wider market in future.
Those intrigued should also be ready to ask a couple of questions. It will be important to examine the liquidity profile of the portfolios, and investors should also recognise from their experience with other, more conventional funds that diversification benefits often prove a mirage in times of stress.