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New ZEDRA fund offers solution for trustees


Trustees wanting to ensure that trust assets are invested in a ‘safe and secure fashion and benefit from best-of-breed investment management’ now have a new option – the ZEDRA Fiduciary Investment Fund. The fund is an open-ended structure based in Jersey.

The new fund has been designed to address a range of issues faced by trustees charged with overseeing smaller client mandates, where the cost of appointing or changing a fund manager can often be prohibitive. There are currently two sub-funds, both with a medium risk strategy, with one aimed at total return investors and the other more considerate of generating a stable income flow, currently targeting a yield in excess of 3 per cent. In designing the fund, ZEDRA has sought to focus on delivering a low fee structure.
ZEDRA will appoint and monitor the performance fund managers using tried and tested methodologies it already applies to the GBP7 billion of client access currently under its control. Assets can be switched between managers within the Fiduciary Investment Fund, minimising transition costs, which may also be beneficial for tax planning in certain client scenarios.
Mike Farley (pictured), Managing Director of ZEDRA Fiduciary Investment Services said: “If a trustee has GBP50 million to invest, you can allocate your financial assets between two or three different investment managers, to reduce manager risk and still have sufficient assets to negotiate competitive costs at the manager level. This is more problematic if your trust fund has GBP3 million to invest.
“This is where our new Fiduciary Investment Fund comes in: It allows trustees to reduce active manager risk and in turn portfolio volatility, but also to benefit from lower ongoing management charges as the collective assets of the fund are significant. We developed the fund because we saw the need for an investment solution built for trustees, which isn’t constrained to one investment manager’s process where you are tied to a specific strategy and style.
“We have been able to price the Fund very competitively, as history shows that minimising costs feeds directly through to performance and compounds into higher net returns.”
The ZEDRA Fiduciary Investment Fund is currently only available to clients of the ZEDRA Group and, more specifically, Sterling investors. However Rob Lucas, Director of ZEDRA Fund Services, adds: “We have already seen a lot of interest in this innovative approach to managing fiduciary assets and therefore anticipate launching a US Dollar version and also opening the fund to other service providers in due course. The appointment of individual investment managers today is becoming more and more expensive for trustees, and can often be a reason why a trustee can stick with an underperforming manager rather than switch elsewhere”.
The fund was launched on 1 August and has assets in excess of GBP250 million.

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