Fundsmith, a UK-based fund manager headed by Terry Smith, is planning to launch a new Emerging Equities investment trust to focus on global emerging market (GEM) equities, effective 25 June 2014.
As part of the launch, Fundsmith is seeking to raise between £100 million and £250 million with an issue price of £10 for the trust.
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The new trust will be managed by Smith alongside head of research Julian Robins in addition to a team of four other analysts.
Dubbed as Fundsmith Emerging Equities Trust (FEET), the closed-ended fund will follow a similar stock selection strategy to that of the Fundsmith Equity Fund and will seek capital growth over the long term by investing in consumer-focused stocks.
Benchmarked against the MSCI Emerging & Frontier Markets index, the portfolio is expected to hold between 35 to 55 companies out of a selection of 139 companies.
The fund, which will have an annual management fee of between 1.6% and 1.75%, will not levy any initial charge and performance fee.
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By GlobalDataSmith said that he will invest £5 million himself to the trust and it will be open for subscription until 20 June.
"The companies in which we seek to invest have relatively predictable revenues and low capital intensity, which helps when you are seeking to invest in companies with high returns on capital.
"The emerging markets index is dominated by China but we will have a much lower exposure. We will have much more in India, a roughly the same in Brazil and South Africa as the index," he added.
