Trendwatch Asset Management, based in London, has launched what it says is the world’s first “fully managed” and regulated spread betting service, winning regulatory clearance to be used by retail investors in the UK and abroad.

TAM started trading in July 2009. Its primary focus is on London-listed mid-tier equities although investors can also trade in other markets, the firm said in a statement.

(At WealthBriefing, meanwhile, clients can now access the WealthSpreads account. To view, click here).

TAM clients open their own personal spread betting account with WorldSpreads Ltd, a regulated and publicly listed company in both London and Ireland. The minimum TAM investment is £5,000 and there are no redemption fees or other constraints on clients who wish to pull out funds.

Client accounts are linked to the TAM Master Account, which is controlled by the investment managers. Whatever spread bets or actions the investment managers take on the Master Account are mirrored automatically on the client accounts in direct proportion to the amount of money in each client’s individual TAM account.

“Because spread betting is a geared investment, this suggests that TAM might be a high risk vehicle. However, TAM emphasises risk mitigation techniques. It uses the gearing inherent in spread betting not to increase exposure to individual shares, but to increase diversification, thus reducing portfolio risk,” the firm said. Client trades are automatically protected with stop-losses to limit losses on adverse market movements

In the nine months since inception up to 1 April 2010, the TAM Master Account showed a net gain of almost 20 per cent, while client accounts are under 50 per cent fully invested, implying that further upside is possible.

The rollout of the service, which has received authorisation from the Financial Services Authority, comes at a time when spread-betting continues to develop as a form of market trading. Gains from spread-betting are free from capital gains tax and stamp duty on share transactions. Major players in the spread-betting and contracts for difference markets include IG, CMC, Capital Spreads and Finspreads.