Momentum Global Funds - Harmony Portfolios
Castlestone Management is a regulated investment advisory firm that advises on two UCITS funds focusing on equities - Low Volatility Income and FAANG+.
Castlestone funds are available on most offshore distribution platforms, life companies and pension providers. They have a distribution team whose role is to get financial advisers around the world to offer the funds to their clients.
> Independently owned and regulated.
> Advisers proposing these funds more often than not use expensive share classes which pay high trail commissions and charge high entry fees.
> Very small investment team relative to more established fund houses.
> Share class fees are not explained on their website.
Castlestone Management operate two UCITS funds:
1. Low Volatility Income Fund - the objective of which is to generate capital growth from the equity market whilst maintaining in aggregate lower volatility relative to the broader US equity market.
2. FAANG+ - the objective of which is to generate growth mainly through the exposure to the development, advancement and use of global technology. The majority of the fund is invested in Facebook, Alphabet, Amazon, Apple and Netflix, and holds various other names including Tesla, Microsoft and Baidu.
Castlestone Management used to operate a Gold Bullion fund which was forced to shut down, we believe due to the fact that it had lost so much money unrelated to the performance of gold.
Information on Castlestone Management is limited, and their website does not provide a great deal of detail regarding the costs of the funds which we know have some outrageously expensive share classes which are often sold by financial advisers around the world to benefit themselves at the expense of their clients. Costs can be in excess of 2% per year with up to 6% entry fees. This, on top of portfolio bond charges, commissions and ongoing adviser charges, make for a very expensive proposition indeed.
If you hold these funds in your portfolio, contact us to get a second review and you may be surprised as to how much you are actually paying in fees every year.
We believe that there are more cost effective, more transparent and potentially better performing investment options. For example, instead of paying through the roof for the Low Volatility Income Fund, which will only be a drag on performance, you could invest in a low cost ETF such as the iShares MSCI USA Min Vol Factor ETF which has an expense ratio of just 0.15%, amongst many other low volatility funds out there in the market.
If you hold these funds via an offshore bond or platform, you should double check which share class you hold as it could be costing you more than you need in fees and performance.
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