Columbia Threadneedle Investments expand its US equity fund range with the launch of the Threadneedle US dsciplined core equities fund in its Luxembourg SICAV. Managed by Brian Condon and Peter Albanese in Boston, the fund provides smart exposure to US large-cap companies through a quantitative approach with some fundamental analysis.
The fund will target outperformance of 150 basis points (gross of fees) over the S&P 500 index annualised over a period of 3-5 years, with a target tracking error of 2-4% and an Ongoing Charges Figure (OCF) of 45 basis points per annum for the Z (platform) share class, including an Annual Management Charge (AMC) of 30 basis points. The management team of 10, led by Brian Condon, head of Quantitative Strategies, currently manages more than US$18bn in assets, including more than $15bn in a similar US mutual fund strategy.
The long-only fund will hold around 80 stocks and aims to generate returns through stock selection whilst avoiding sector risks by building a sector-neutral portfolio. The fund managers may take discretionary investment decisions, for example on grounds of data quality or fundamental risks not captured by the models. They collaborate with a team of approximately 30 sector-focused fundamental analysts to complement their quantitative model’s outputs with proprietary assessments.
Gary Collins, head of Wholesale Distribution, EMEA at Columbia Threadneedle Investments said commented: “This fund complements our existing range of higher alpha US equity products and gives clients more choice of investment strategy for their US equity allocations. Brian, Peter and their team have a strong track record in running disciplined US equity funds, combining their proprietary quantitative models with the broader fundamental research and insights of Columbia Threadneedle Investments’ extensive US equity capabilities. We are delighted to now be able to offer our clients outside the US pooled fund access to this strategy.”
Fund manager Brian Condon commented: “This fund aims to give investors consistent outperformance of the US equity market in a lower cost product. We believe that a fundamentally based, quantitatively implemented investment process can identify and exploit mispricing opportunities in a consistent and repeatable manner.”
“By identifying fundamental drivers of stock returns within different industries, we build industry-specific stock selection models which identify undervalued as well as overvalued stocks. Drawing on these models, we construct a diversified, risk-managed portfolio that emphasises stock selection while minimising unintended style, sector, and industry exposures.”
Initially registered in Luxembourg, the fund is intended for distribution across other markets (Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland) pending regulatory approval in each country.