BANK OF Ireland is opening an investment fund through its private banking division that will invest in blue-chip publicly traded companies that deliver strong returns and sustainable dividends.
The Global Fundamentals Fund, which is actively managed by Bank of Ireland Private Banking executive Leona Nicholson, has delivered a return of 18.7 per cent for seed investors since its launch last September.
The fund is made up of 65 equities, including Pfizer, Unilever, Wal-Mart and Nestlé, and is weighted towards North American and European companies with a large exposure to emerging markets. Consumer companies make up 26 per cent of the fund’s investments, followed by technology firms with 17 per cent and industrial firms with 11 per cent.
The aim is to generate high single-digit percentage returns for investors who want higher returns from the markets as part of an overall investment portfolio and want to take some risk as deposit rates on cash investments fall.
The fund is worth €40 million and Ms Nicholson said she wants to grow it to €100 million over the next 12 to 18 months. “Many investors agree that quality global companies look cheap relative to their own history and to other asset classes,” she said. “My focus will be on stock selection using fundamental valuation criteria and where I see sustainable growth in terms of stock price and dividends over the next few years.”
The fund is open-ended and the minimum investment is €100,000 and there is no upper limit.
The bank charges an annual management fee of 1.1 per cent.
“Over recent years, clients have moved to more conservative investment portfolios and we have seen reduced risk appetite among clients,” said Kevin Quinn, investment director at Bank of Ireland Private Banking. “However, as deposit rates fall in 2012, many clients are looking at the full range of investment-based opportunities with appropriate levels of risk.”
