Lewis Securities hits retail market
A boutique fixed interest fund manger has launched its first retail product — a high yield fund.
Sydney-based Lewis Securities will invest government securities, listed debentures and fixed interest securities with the fund holding between 30 and 40 different investments at any one time.
Managing director Tony Lewis said the fund’s investment policy was conservative but the aim was to produce high regular returns.
The Lewis High Yield Fund is expected to return between 7 and 9 per cent after fees, which have been set low at 80 basis points based on the value of the assets in the fund.
“We are spreading the investments widely to reduce risk and we hope to add return by trading some the funds during the year,” Lewis said.
“Because we will be small, we hope to raise about $30 million in the first year; we will have no difficulty trading some of the portfolio each year.”
The amount of the portfolio that would be traded each year would vary depending on the performance of the investments.
“The problem the big fixed interest managers have is that it is hard for them to trade investments due to their size and they miss out on earning extra income for the fund,” he said.
The minimum investment in the fund is $50,000, which Lewis admits is to keep the operating costs down. There will be an adviser trail of 0.25 per cent, but the manager is not expecting the mainstream adviser groups to use the product. It is not looking at adding the product to platforms at this stage.
“We are expecting the specialist advisers who build balanced portfolios for clients to look at adding our fund to their lists,” he said.
“With stock markets and property rising, it is time to balance the portfolio with fixed interest products that provide income and liquidity.”
Lewis Securities has celebrated its 21st year in business as a fixed interest specialist. In recent years it has been running individual managed accounts (IMAs) for clients, but the new fund is the manager’s first public offering.
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
