CF Taylor Young Opportunistic Fund

What Investment, June, 2007

What INVESTMENT

Product of the month June 2007

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Taylor Young Investment Management launched the CF Taylor Young Opportunistic fund at the beginning of April, in response to demand from existing clients for the fund manager to expand its product offering across the risk spectrum. It is benchmarked against the FTSE All-Share, aiming to outperform by investing in growth companies. It is a more aggressive fund than Taylor Young's other products. The fund will operate as a best ideas product, searching for opportunities across the UK market--including the FTSE All-Share and AIM.

The fund will hold 25 to 30 stocks and is unconstrained. Fund manager Nick Rundle also currently runs Taylor Young's Equity Income and Growth funds. He will operate on a thematic basis, incorporating a neutral style-bias. This involves highlighting various drivers and enablers that the fund manager believes are important in determining future asset pricing. Investment themes are then developed from this point.

Minimum initial investment: 7,000 [pounds sterling]

Initial charge: 5 per cent

Annual management charge: 1.5 per cent (for Class A shares)

Contact: visit www.tayloryoung.com or call 020 7378 4500

Robin Amlot says: You wouldn't treat a flutter on the roulette wheel as an investment but, as I'm sure you're aware, there are different levels of risk and reward available in the investment world, Generally, the higher the risk level, the higher the potential reward, The CF Taylor Young Opportunistic Fund, being run as an OEIC, is certainly in the higher risk/reward category as funds go.

Taylor Young is one of the smaller fund managers around, having previously specialised in discretionary portfolios for seriously wealthy individuals. The firm takes a bottom-up approach to stock selection. It is a thematic research-led house, typically identifying around 30 themes but perhaps only actively investing in seven or eight of them in each fund.

The use of themes is driven by the fund mandate. Among themes currently identified, the group is negative on telecommunications, turning negative on UK property as the sector matures, positive on demographic change (as the population ages) and sees the healthcare sector as Offering the best value among UK stocks on a three- to five-year time horizon.

Nick Rundle, a former investment manager at Gerrard, will run the fund. He'll be investing in 25-30 of his best ideas. Immediately you should recognise the concentration of effort--most unit trusts usually invest in more than twice that number of shares. So those who don't fancy a bit of risk may leave right now. On the other hand, the focus and lack of diversification could actually boost potential returns, provided Rundle's best ideas are the right ideas.

Run for more than a year as a "model" portfolio, the Opportunistic fund would have returned 141 per cent against its FTSE All-Share benchmark return of 94 per cent. It will have a turnover of up to 100 per cent a year, which may put you off, but do remember this is an unconstrained, high-conviction portfolio that, while benchmarked against the FTSE All-Share, may also invest in AIM stocks.

You may feel this short-term trading approach has the potential to generate strong returns.

If you invest 40,000 [pounds sterling] in Class C shares then there is no upfront fee and the annual management charge comes down to 0.5 per cent. Along with the other fees (detailed above), there's also a performance-related fee. However, Taylor Young is reported to be pledging that it will not levy the charge if the market slumps.

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