NEWS
Sparinvest adds trio of asset allocator
portfolios to Luxembourg fund range
BY DANIEL JUDGE
Danish fund manager
Sparinvest has launched
three asset allocator funds
into its Luxembourg Sicav
that mix active management
with quantitative
screening based on a strategic
model.
The funds, which provide
equity and fixed
Banking shakeout points to contraction of offshore deposit sector
8
FUNDS FACTS
Name: Sparinvest Strategic
Asset Allocation Funds
– Securas, Procedo & Equitas
Domicile: Luxembourg
Initial charge: up to 3%
Annual charge: 1.5%
Currency: �
The offshore deposit-taking
sector is certain to shrink
following Banco Santander’s
£612m acquisition of
the UK’s Bradford &
Bingley’s (B&B’s) retail
banking operations.
The joint Santander and
UK government bail-out of
income exposure, are
designed to deliver outperformance
in the shares
component by focusing on
three styles: momentum,
value and small cap.
The fund house said
these factors were known
to outperform the market
over the longer term. It
added that the equity strategy
was based on academic
research and was
designed to provide the
optimum return for each
unit of risk taken.
The portfolios will each
have exposure to more
than 1,000 securities and
are risk-rated cautious (75%
fixed income, 25% equity),
balanced (65% equity, 35%
fixed) and aggressive (100%
equity, though fixed income
France, Portugal cut mortgage rates to kick-start market
Major non-resident mortgage
lenders in France
and Portugal have cut
interest rates or launched
new or promotional mortgage
products, according
to International Private
Finance (IPF).
Jo Cowling, the Londonbased
bespoke international
mortgage solutions provider’s
consultant for
the troubled lender follows
the Spanish banking giant’s
purchase this year of
Alliance & Leicester (A&L),
another victim of the credit
crunch. Both B&B and A&L
have Isle of Man-based
deposit taking arms.
Abbey, also owned by
French mortgages, said the
cuts have been most noticeable
in France, where mortgage
lenders have begun
offering 100% mortgages
for the first time in an effort
to spark flagging interest.
The cuts come at the
start of what is traditionally
one of the busiest periods
for overseas property purchases,
and could indicate
Top 10 countries by allocation
France
Germany
Australia
Sweden
US
Japan
UK
Switz
Neth
Italy
0% 5% 10% 15% 20% 25% 30%
Source: Sparinvest
may be included on a tactical
basis). The fixed income
component will be a mixture
of European government
bonds, corporate and
emerging market debt.
Sparinvest said the equity
Santander, has an offshore
operation based in Jersey.
Abbey International is
moving into the wealth
management space through
the integration of its
platform with that of
Santander’s private banking
operations.
that mortgage providers in
other popular overseas
markets may follow suit,
according to IPF. Examples
of new mortgage products
include 0% introductory
margins, improved interest-only
terms and innovative
euro mortgages that
track the traditionally lower
Libor CHF Index.
Like others in the
INTERNATIONAL ADVISER [www.international-adviser.com] OCTOBER 2008
strategy filters the MSCI
World Index into separate
indices based on region
and market cap and then
into stocks with the strongest
momentum characteristics
and, separately, value.
The A&L deal was due
to be completed by mid-
October. Santander said for
the time being the B&B
brand would be retained.
But commentators think at
least one and possibly both
brands will disappear in the
longer term.
European mortgage industry,
IPF hopes further rate
cuts will be a turning point
in the interest rate cycle.
It said the trend among
UK-based overseas home
owners to refinance their
properties to take advantage
of the sterling/euro
exchange rate would
become more popular only
as refinancing costs drop.
Advisers urged
to check IHT
when altering
certain trusts
Advisers have been urged
to seek tax guidance before
changing the beneficiary of
an interest in possession
trust, following changes
to their UK IHT treatment
from 6 Oct.
Trusts of this kind created
before 22 March, 2006
had been given a two-year
grace period following the
Finance Act of that year,
in which regulations were
brought in to harmonise
the tax treatment of different
types of trust.
But this situation has
now come to an end.
Amending the list of income
beneficiaries for old interest
in possession, or
flexible trusts, a move that
was previously a ‘potentially
exempt transfer’,
may now trigger an IHT
liability.
Interest in possession
trusts created before
22 March, 2006 will lose
their status as being subject
to pre-2006 tax treatment
if a beneficiary is altered,
leading to them being
subject to a tax charge
every ten years and a
levy when the beneficiary
receives capital.
Whether a tax charge
arises depends on the
values involved and many
trusts will escape the tax
charge for this reason.
EXCEPTION
There is an exception to the
new IHT regulation if it is a life
policy trust and a beneficiary
dies. The rules allow a new
income beneficiary to be
appointed without bringing
the trust into the post-2006
Finance Act regime.
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