Why invest in a fund of funds OEIC or unit trust?
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TAX ADVANTAGES Funds of funds do not pay capital gains tax when the fund manager deals in funds within the portfolio. This enables investors to defer any capital gains tax liability until they ultimately sell their investments. |
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COST EFFECTIVE Fund of funds managers are typically able to negotiate substantial discounts through their ability to buy in large tranches, significantly reducing the effects of charges. |
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SIMPLICITY You need only do one transaction. Your money will then be invested by the manager to give you instant access to a wide range of underlying OEICs and unit trusts to achieve your desired investment objective. Furthermore, the resulting paperwork you receive is minimal. |
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DIVERSITY Actively spreading an investment around different countries, sectors and investment house styles helps to reduce risk. By constantly monitoring and adjusting the portfolio, the fund manager may benefit from investment opportunities as they arise. |
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ACTIVE MANAGEMENT The fund management team makes the choices, takes active decisions about fund selection and continuously monitors the investments. This addresses complex issues for you such as asset allocation, diversification of risk and the selection of individual funds to meet investment expectations. |
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What potential risks should I be aware of?
Although investment in a funds of funds OEIC and the New Star Cautious Portfolio unit trust is typically regarded as lower risk the capital value of your investment will fluctuate and you may not get back the amount invested. For funds producing income, the level of income is not guaranteed and may vary.
Past performance is not necessarily a guide to future performance.
As many of the New Star Portfolio funds of funds and the New Star Cautious Portfolio Unit Trust invest outside the UK, the value may be affected by exchange rate movements. In addition, where investment is made in emerging markets their potential volatility may increase the risk to your investment.
Single geographic region exposure increases potential volatility in returns.
In addition for the New Star Cautious Portfolio Unit Trust:
Derivatives may be used with the aim of controlling risk. Annual management charges together with any costs in implementing derivative strategy will be charged to capital. Capital growth will therefore be restricted.
You are advised to read the risk warnings contained within the simplified prospectus before investing. If you are in any doubt about the suitability of an investment, please contact your financial adviser.
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Issued in the UK by New Star Asset Management Limited. Authorised and regulated by the Financial Services Authority.