Thesis Asset Management is launching a risk-graded series of model portfolios for investors that invest in direct securities with a minimum investment amount of £25,000.
The firm is in the process of developing seven risk-rated portfolio options with an aim to have launched by the end of the year.
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The Direct Securities Model (DSM) portfolios will sit alongside the company’s existing offering of active and passive model portfolios that invest in direct equities and collectives.
The DSM will be available directly through Thesis’s nominee services and the Ascentric platform.
Depending on the equity content and risk profile of each portfolio, Cook has estimated the cost savings could be between 15 to 20 basis points shaved off total expense ratios by avoiding the underlying fund managers charges.
The highest risk, active, collective model portfolio that Thesis currently offers has underlying fund costs of 0.93% and Cook said using direct equities could almost half that cost.
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By GlobalDataLawrence Cook, director of marketing and business development at Thesis, said: "We want to achieve levels of diversification by allowing clients to invest directly into securities, not just unit trusts.
"We are launching direct securities models because this delivers tangible benefits to clients and their advisers. In particular it will provide access to discretionary services to a wide range of clients and see on-going costs reduce by as much as 40bps per annum.
"With access from £25,000 per account it means direct securities models can be a key part of an adviser’s investment proposition," Cook added.
