MEDIA RELEASE: 9 APRIL 2010

Frontier Capital’s Multi-Asset Passive fund wins growing support attracting £50m in first year

Low cost access to market returns of 8 asset classes forms ideal core holding for IFA clients’ long-term investments.

In its first year the IFDS Frontier MAP Balanced Fund has grown to £50 million under management primarily from subscriptions from UK independent financial advisers. The Fund, which is ISA eligible and has daily dealing, captures the returns of eight traditional and alternative asset classes in one holding through low cost, highly liquid indexation strategies.

The IFDS Frontier MAP Balanced Fund is managed by Frontier Capital Management LLP (“Frontier Capital”), the UK’s pioneer of multi-asset passive investment management.  In its first year it has delivered a total return to investors net of charges of 20.76% (for the year ended 31 March, 2010).  The Fund’s investment philosophy is based on Frontier Capital’s “Four Pillars of Investing”:

• Traditional and alternative asset classes generate long run real returns
• Strategic asset allocation drives the majority of portfolio return and risk
• Modern portfolio theory: diversification increases risk-adjusted returns
• Index investing outperforms the majority of actively managed investments in the long term

The IFDS Frontier MAP Balanced Fund is a UK OEIC authorised and regulated by the FSA.  In a single investment, investors gain access to the returns of Global Equities, Global Fixed Income, Emerging Equities, Emerging Bonds, Global Real Estate, Commodities, Hedge Funds and Managed Futures. Based on historic evidence each asset class has demonstrated an ability to provide a return above inflation and cash (the “risk premium”) over medium to long-term periods, showing varied correlations within the portfolio, lowering portfolio volatility and increasing risk adjusted returns compared to a traditional equity/bond portfolio.

The strategic asset allocation takes inspiration from the US super-endowments such as Yale and Harvard, but recognises the shorter time horizon and increased liquidity requirements of UK investors. The Fund is rebalanced annually with only minor adjustments made each year to reduce risk and trading costs on the portfolio.

The IFDS Frontier MAP Balanced Fund has gained support from many award-winning UK IFAs.  Andrew Brook-Dobson, Director of Harrogate-based Brook-Dobson Brear describes the fund as “a sophisticated investment solution delivered in a straightforward manner”.

Michael Azlen, CEO and founder of Frontier Capital, comments,

“The IFDS Frontier MAP Balanced Fund replicates the evidence-based investment process that we have operated for our offshore multi-asset passive funds for private clients, family offices, charities and private banks over the last five years.

The fund allows smaller investors to take advantage of our ‘one-stop’ approach to investing, and provides a tax-efficient means for UK investors to access the strategy.

With the move towards RDR and TCF, we are increasingly seeing advisors look to systematise their investment process and Frontier Capital’s funds are consistent with that methodology through evidence-based investing and a long-term, strategic asset allocation.    The Fund provides Advisers and their clients with a long-term core investment solution.  By providing a diversified, ‘one-stop’ investment, the advisor can outsource all or part of their investment management to us, allowing more time to focus on the financial planning.”

Andrew Cracknell, Partner of Frontier Capital, adds

“We have built strong relationships with top UK IFAs who appreciate our honest and low-cost approach to investing, and this Fund has opened the door to new clients.

One of the aspects that sets us apart from other multi-asset passive funds that have launched recently is our relatively high allocation to alternative asset classes due to the attractive varied correlations they offer and their ability to decrease risk and increase risk adjusted returns, but it is an area that is often less understood.  We invest a great deal of time educating clients to ensure that they understand all areas of our investment philosophy and this continuing education is a valued part of our client service offering.”