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Expat Investor : September October 2009
NEWS ROUND-UP expatinvestor.com 10 EXPAT INVESTOR September/October 2009 Sustainable investment fund from Co-operative Investments FSA changes its Compensation Scheme The Co-operative Investments is hoping to attract investors with the launch of its latest unit trust that targets the investment opportunities emerging from "a changing world and a shift in attitudes towards sustainable business practices". The Sustainable Diversified Trust invests in companies well placed to benefit from fundamental global changes including the economic importance of emerging countries such as India and China, urban regeneration, the global ageing population and the impact of climate change. These investment themes, once regarded as the domain of ethical funds, are increasingly being embraced by the mainstream investment community due to their potential for generating significant returns, explains The Co-operative Investments. The new fund will be an actively managed multi-asset fund that offers retail investors long-term capital growth and will sit within the IMA Cautious Managed Sector. It is being launched in response to growing investor demand for lower-risk investments and evidence that the financial crisis has led to increased willingness from investors to invest in sustainable businesses that behave in a responsible way. Zack Hocking, Head of Investments, says, "The world is changing and it is throwing up some highly attractive opportunities for long-ter m investors. "The need to tackle ageing populations, climate change and global power shortage will see significant investment in those areas in coming years. The Sustainable Diversified Trust will seek out those companies that are well positioned to benefit from addressing these issues. "We believe this is a good choice for investors with a cautious attitude to risk who want to invest for the medium or long ter m." The Trust will be listed in the IMA Cautious Managed Sector and will hold a mix of equities, bonds, cash and property -- reducing the risk and volatility experienced with pure equity funds. The Sustainable Diversified fund will be managed by The Co- operativeAsset Management (TCAM). Fund manager is Linda Desforges, who takes over following more than two years overseeing its multi-manager funds. Sustainable Leaders Fund Manager, Mike Fox, will undertake the stock selection for the equity component of the new fund. The minimum investment lump sum is £1,000 or £50 per month and the fund will hold an asset mix of up to 60% equities (including properties) and up to 80% fixed interest (including cash). It can also hold up to 20% in alternative investments. In line with the fund's remit to invest sustainably, it will not invest in companies involved in ar maments, animal testing for cosmetic purposes, tobacco or mining. The UK's Financial Services Authority (FSA) is introducing new rules for the Financial Services Compensation Scheme (FSCS) on banks, building societies and credit unions, which will see individuals and small businesses compensated quicker, and will ensure protection for increased numbers of people. The fast payout rules, which come into force on 31 December 2010, will mean many individuals and small businesses will receive compensation within a target of seven days, and all payments within 20 days as required under the Deposit Guarantee Schemes Directive. This will greatly reduce uncertainty for consumers. An additional change is that in future, payouts will be made on a 'gross' basis, which will effectively ring-fence the deposits if a depositor has savings and loans with the same fir m. Currently, any outstanding loan or debt held with a firm would have been deducted from the amount of an individual's or small business' savings before compensation was paid out. The new rules change this arrangement and ensure that the customer's savings will be protected to the limit of £50,000 and not used to offset loans. Consumer awareness of the FSCS will also be boosted by a new rule which comes into force from 1 Ja nuary 2010, requiring firms to provide information on the existence of the FSCS and the level of protection it offers to depositors, as well as proactively infor ming customers of any additional trading names under which the fir m operates.