Published on 8 December 2010
When I speak to clients about their investment requirements many are often looking for the same things just in different proportions. Their normal "investment shopping list" comprises of;
The first three items on the list tend to be a trade off against each other. For instance the more income and stability required the less the scope in the overall portfolio for capital growth.
A similar balance has also to be achieved between diversity and simplicity. Diversity in terms of geography and asset classes has always been important but never more so than in the present economic climate. It is an effective way of reducing risk but of course the more diverse a portfolio the less simple it all becomes.
Barclays Stockbrokers as the direct brokerage arm of Barclays Wealth make available and highlight the benefits of many products from a wide range of providers so it is great for me to be able to highlight a Barclays Wealth suite of products that just may provide everything on your shopping list…and possibly even a little more!
The new Barclays Wealth Global Market funds range is designed to provide a different ‘blend’ of investments to match clients’ different risk-reward preferences.
Simplicity from the investor’s perspective is a key feature of these funds and that starts with the fund names. Numbered 1 to 5, the risk profiles they are designed to match follow the numbers low to high. By assessing your own risk appetite on a similar basis (1 low, 5 high) it makes it easier for you to decide which fund may provide the best fit for your individual situation.
Image 1: Barclays Wealth Global Markets
I like these funds for various reasons the first of which is the ability to achieve global diversification in a single investment. Each fund invests in exactly the same asset types; developed and emerging market equities, government and corporate bonds, hedge funds, commodities and listed property. The different risk profiles of each fund are achieved by mixing the assets in different proportions.
Image 2: Example asset allocation (Barclays Wealth Global Markets 3)
Another key point for me is the ongoing management provided by Barclays Wealth. The asset allocation will be constantly adjusted as the economic outlook alters to fit our expert’s views while maintaining the overall risk profile of each fund. Diversity and professional management combined with simplicity!
The asset allocation and diversity is provided mainly via a range of Exchange Traded Funds (ETFs). The popularity of these funds has grown massively over recent years as they are seen to provide a cost effective way of tracking sectors and markets yet they are more flexible than the average Unit Trust as they trade instantly just like a share. As ETFs are essentially listed trackers they will not outperform the market or sector to which they are linked. However it is hoped that the ongoing management of the asset allocation of the Global Markets Funds will produce this outperformance.
When you consider the diverse nature and management of the funds they also offer value for money. The initial fee (Initial Service Charge) has been reduced for Barclays Stockbrokers clients to 1% and the Annual Management Charge is 0.75% (Global Markets 1) - 1% (Global Markets 2-5). They are all eligible for ISAs and SIPPs so if you buy them inside one of these accounts you add tax efficiency to their list of benefits.
Bear in mind that these funds’ values can fall as well as rise so you might lose money. Some of the portfolios invest in Emerging Markets equities and bonds which carry a higher risk than investing in developed markets. These investments should be held with a medium to long term view – generally, for not less than five years. If you are unsure about their suitability for you, you should seek independent advice. Barclays Stockbrokers does not offer investment advice.
Each of the Global Markets funds are available for online trading. To invest online;
View our Funds dealing How2 video for more information on how to place a funds order online.
I can see the funds playing different roles in different peoples’ portfolios.
1. For those people who want a balanced portfolio to match their individual needs I can see the appropriate fund being a total solution - a "one stop shop" for all their investment needs.
2. For those people who want to select some of their own investments I can see the appropriate Global market fund being a core investment inside their , or . A platform providing global diversification upon which they can build their own portfolio.
3. In a more specific way I can see Global Market 1 being seen as an appropriate home for monies that clients may presently hold in cash ISAs. Clients are getting frustrated by the poor yields these tax efficient vehicles currently offer. They could arrange to transfer the whole ISA into our Investment ISA (keeping the tax efficient shelter intact) and simply use this fund within the ISA to provide tax free income at the current rate of 3% and at the same time add the potential for some capital growth. Admittedly this would move them out of a no risk zone into a low risk one, nevertheless it is a move worthy of consideration.
Whatever your position if Global Markets funds are of interest, have a look at the launch factsheets or call us on 0845 300 1020*
Good luck with your investing!
PS – want to know more about funds in general? Read my Cotters Corner: Funds (April 2010) for some funds basics including how they could play a role in your portfolio.
Page last updated 8 December 2010
Barclays Stockbrokers, which is the Group name for the businesses of: Barclays Stockbrokers Limited, a member of the London Stock Exchange and PLUS. Registered No. 1986161. Registered VAT No 243 8522 62; Barclays Sharedealing, Registered No. 2092410 Registered VAT No 243 8522 62; Barclays Bank Trust Company Limited, Registered No. 920880. Registered VAT No 243 8522 62. All companies are registered in England and the registered address is: 1 Churchill Place, London E14 5HP. All companies are authorised and regulated by the Financial Services Authority.
*Calls to 0845 numbers from a BT residential line will cost no more than 4p per minute, plus 9.9p call set-up fee (correct as at April 2010). The price on non-BT phones may be different; please check with your service provider. You can only use these numbers if you are calling from the UK; if calling from outside the UK, please call +44 141 352 3909. Calls may be recorded to monitor the quality of our service, to check instructions and for security purposes.
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