Lowes Financial Management will launch a UCITS fund aiming to deliver a return of more than cash plus 5 per cent a year over the medium to long term.
The Lowes UK Defined Strategy fund will invest in a variety of strategies most commonly seen within structured investments.
Rather than buying individual structured products, the product will act like a typical UCITS fund for advisers and their clients, offering daily pricing, a highly diversified asset base, wide wrapper availability, and platform execution.
It will create, buy and sell strategies commonly found within the structured investment market, diversifying across different types of product but with a particular focus on autocall—or kickout—strategies which are most favoured by financial advisers and their clients.
Ian Lowes, managing director of Lowes, said: "With this innovative new approach it will now be possible for advisers to provide their clients with access to the returns available from a pool of structured investments, whilst also having the flexibility to withdraw money at any stage."
Autocall strategies run for a set period of years but offer the opportunity to deliver a pre-determined return at certain points in time - such as an index reaching a certain level at a future date - which then result in products delivering its return and maturing for subsequent reinvestment.
Mattioli Woods has been an active player in the UCITS structured products arena for the past couple of years and its first fund was launched in November 2016.
Mark Fuller, head of structured products at Mattioli Woods, said the most popular retail structured product in the UK was the defensive autocall.
"Some financial advisers advise putting all your money in one structured product. Our approach has never been that. Our approach has been to invest little and often in structured products," he said.
The Lowes fund will continuously repeat this process through the underlying investments, ensuring it has exposure to many strategies at any given point.
Mr Lowes said this will create a diversity of return profiles and counterparties. He will select the investments and will also actively manage the portfolio, with the option to sell investments ahead of any potential return date if in the interests of shareholders.
"Based on tried and tested strategies, and diversifying investments across a broad spectrum of issuers, we think this has the power to transform the way advisers think about—and invest clients in—structured products," he said.
The fund goes live on 11 December and has a three-week offer period when it is priced at £1 a share.