Welcome to our first bulletin for The Tailored Asset Management clients of Charter Financial Planning.

We intend to issue short bulletins on a regular basis covering two or three brief topics. We hope that you find them of interest and if you have any comments or financial items that you would like us to cover please email us on TAM@charter-partnership.co.uk

In this first bulletin, we highlight one of the independent ratings agencies that we use to assist our fund selection process.

The Forsyth-OBSR Fund Ratings Service aims to provide professional intermediaries with a clear set of fund recommendations. The Service focuses on UK authorised unit trusts and Open Ended Investment Companies. Around 250 funds have been awarded A, AA or AAA status. The service relies heavily on the qualitative, ‘forward-looking’ research approach rather than simply analysing past performance. It is not available to members of the public, but only to authorised intermediaries.

All the equity and fixed interest funds currently recommended within the Tailored Asset Management portfolios have at least an A rating, most are AA or AAA. Property funds are not rated by Forsyth-OBSR, nor are life assurance and pension funds.

Since we started the Tailored Asset Management process, a few fund ratings have changed and our “Buy” List has altered. We focus here on two high profile funds that have recently been moved from our Buy List for different reasons.

Credit Suisse Income Fund
Following a recent downgrading by Forsyth-OBSR to an A rating, this rating was suspended on 24th October following the departure of fund manager, Leigh Harrison. The management of the fund passes to Errol Francis who has worked alongside Leigh Harrison as support manager on the fund since 2004. Credit Suisse is confident that the transition will be seamless. However, as our process relies heavily upon independent ratings, we are recommending that clients sell this fund as there are currently twelve Forsyth-OBSR AAA and AA rated funds and seven active A rated funds to choose from. We will be in contact individually with those clients holding CS Income.

Fidelity Special Situations
This flagship fund has served investors very well and has been recommended by us for many years. The fund remains an AAA rated fund with OBSR. However, Fidelity announced some time ago that the fund manager, Anthony Bolton, would not be managing the fund from 2008. Last month, Fidelity announced a restructuring of the fund as part of its succession plans. Next year, the fund will be split into two equal-sized portfolios, both of which will be managed by Anthony Bolton throughout 2006. He will then relinquish the management of one portfolio but continue to manage the other until the end of 2007. The details of future managers are as yet unknown.

At the same time, Fidelity has increased the initial charge on the fund to dissuade new investment, although this would not apply to investments made through either the Transact or Skandia Wrap.

We have removed Fidelity Special Situations from our Buy List. It has been replaced with Merrill Lynch UK Fund. We do not believe that investors should sell their holdings in the fund which continues to perform significantly above the average for the UK All Companies sector, but we will be watching closely.