Rebalance June 2021

Changes and the New Fund documents

It is all about Thematics!

Following our Investment Bulletin of last week and the article about inflation and thematic allocations, our Investment Committee have agreed to make some changes to the investment strategy.  The pandemic clearly dictates the headlines and the progress of global immunisation, but what we are now seeing is the increment of inflation in some sectors.

At KMG we have always looked at the bigger picture and whilst we have provided you with pie charts showing the global spread of your assets, the world is becoming more and more accessible so the physical location of a company or its staff is less relevant.  So, the future is about considering investment themes that are relevant now, and into the future.  About adapting as the world and we, the people within it, change how we live our lives. 

This rebalance involves a number of changes and we would ask you to review the relevant changes table on the “News” section of our website, www.kmg.co.uk/news for the details of the funds being sold or reduced and the new funds that will be added.  The changes speak for themselves where you can see the direction in removal or reduction of more traditional industry and enterprise to the concepts and themes of the future such as the E-Commerce Logistics, Global Recovery funds, sustainable foods and climate change which are all relevant at this time of great change.

If you are unable to access the website, do let us know and the Team can send you the specific tables relating to your portfolio.

Strategy update and risk

The changes this time are across all portfolios and with varying levels of allocation to the new funds ensuring that we maintain the risk profile you are comfortable with.  We have continued to asset-allocate your funds so that your total exposure to equities is within your risk profile and we will continue to monitor and manage the volatility of the strategy.  When we add new funds, we consider the volatility of the portfolio as a whole before changes are made.

Rebalance

As discretionary clients of KMG Investment Management we are advising you of the changes which will be made from the 22nd June 2021.  If you are an investor in the KMG Investment Management fund, the fund manager has already adapted the fund.

Tax and fees

Please remember that these changes will not incur fees from either KMG or your platform provider as neither charge for fund switches.  There will be a marginal increase of between 0.03% and 0.06% per annum in the fees for the funds within the portfolio.

Risk profileOld chargeNew charge
High0.58%0.64%
Medium High0.56%0.61%
Medium0.52%0.56%
Medium Low0.42%0.45%
Low0.35%0.39%

Where funds are held outside an ISA, KMG fund, pension or bond, the changes will be subject to capital gains tax.  Where profits are made, we make no apologies for creating taxable gains – no pain no gain.  We never let the tax tail wag the dog.  Any tax will not be payable until January 2023 and as always, we or your platform provider will inform you of gains to include in your tax return in the future.

Conclusion

Tables showing the changes to your portfolio can be found on our website in the News section along with fund factsheets for the new funds that we will be using.  


As always should you have any queries, please do not hesitate to contact us.

Yours sincerely

The KMG Team