New fund will target world’s undervalued companies

Share analyst and boutique fund manager Intelligent Investor has launched an international fund aimed at longer-term investors who want to access overseas shares but do not have the money and/or the expertise to choose and buy their own stocks.

The Intelligent Investor International Fund plans to hold mainly listed securities in 20 to 40 global businesses that provide superior long-term returns.

Initially the fund will invest in developed countries with stable political environments including the US, Canada, Britain, western Europe, Hong Kong, Japan and South Korea.

The Australian-based investment team is headed by Steve Johnson, who started the funds management business in 2009 with the Value Fund, which invests in Australian companies and returned 36.75% in the year to January 31, compared with 18.86% for the All Ords.

The main aim is to target undervalued securities on the world's stockmarkets.

It will have a 20% maximum exposure to international emerging markets and a maximum of 10% in international unlisted assets. It aims to outperform the MSCI All Country World Investible Market Index (MSCI ACWI IMI) in Australian dollars over a five-year rolling period.

The minimum initial investment is $20,000, with additional minimum investment of $1000 a month. The management fee is 1.4% of net assets and expense recovery is capped at 0.15% of the net assets of the fund.

MONEY VERDICT

It's a start-up so there is no performance to evaluate, but it is from a team with a proven track record. One of the fund's main points of difference is that investors can access it starting with only $200, as long as they sign up for a $200 monthly direct debit.

This makes it suitable as a vehicle to build funds for long-term objectives such as children's secondary and tertiary education. Or it's just a way for small investors to build up their exposure to international shares.

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