Defaqto and Prudential launch guide to multi-asset risk bound fund families

19 March 2018

Today Defaqto, the independent financial information business, has announced that it has launched a guide to multi-asset risk bound fund families in conjunction with Prudential.

  • In recent years, with the market volatility we have seen, there has been a shift in investors’ primary focus from being on return to being on risk
  • Structured CPD guide to help advisers rate and select funds
  • There can be significant differences in structure, process and other features across the various risk bound fund families in the market, so due diligence is very important

Today Defaqto, the independent financial information business, has announced that it has launched a guide to multi-asset risk bound fund families in conjunction with Prudential.

The document is accredited by the CII/PFS and CISI for up to 60 minutes of structured CPD and is designed to enable advisers to:

  • Identify the different ways in which the multi-asset fund universe can be broken down
  • Understand what risk bound multi-asset funds are, how they work, how they can be used and how their sub-set risk targeted market has grown over the last few years
  • Understand how risk bound funds can be rated from both a quality and suitability point of view
  • Understand the benefits of risk bound funds to advisers and their clients

These funds exist as ‘families’ – normally four or five funds run by the same fund management team and following the same investment process but with expected return and risk for each fund increasing across the family. Risk targeted funds aim to maintain a risk level, or match a specific profile, over time. Doing this successfully requires the fund to adapt to market movements by adjusting the asset allocation. Even with the volatility of the market, the risk profile of a risk bound fund should remain fairly consistent, enabling advisers to align the risk attitude of their clients to the funds.

An adviser making decisions about which investment proposition is suitable for a client’s needs will initially have undergone a lengthy process of discovery with regard to their client. Specifically, they will look at the client’s objectives and their attitude to risk. They will then research how best to meet the client’s needs. When looking at investment solutions, many advisers will look at collective investment scheme solutions and specifically multi-asset funds

Pan Andreas, Head of Insight for Funds and DFM at Defaqto, comments:

“For the investor, the benefit of these types of funds is their simplicity, as it is possible for a client to invest in the same family of funds throughout their investment lifecycle.

“However, there can be significant differences in structure, process and other features across the various risk bound fund families in the market, so due diligence is still very important – such funds need to be monitored to ensure that they are meeting their client’s aims and objectives on an ongoing basis, as with any other fund.”

“We designed this guide to help advisers identify the factors to consider in their advice process and how to mitigate some of the issues and risks involved.”

The full report is available at https://defaqto.com/advisers/publications/multi-asset-risk-bound-fund-families-how-to-rate-and-select-them/

Contact person for press enquiries:

Looking for more comments or data please contact us.

Katherine Blackler, Defaqto

Phone: 01844 295 457

kblackler@defaqto.com

About Defaqto

Defaqto is an independent financial information business helping financial institutions, advisers and consumers make better informed decisions.

Our experts research, collect and continuously assess over 41,000 financial products, including General Insurance, Banking, Protection and Wealth sector and also for Funds and Fund Families, and rate them on a scale of 1 to 5 based on features and benefits that are relevant to consumers. These ratings are known as Star and Diamond Ratings.

They provide consumers and financial advisers with an unbiased and transparent assessment of the products and policies in the market from Defaqto experts.

Based on facts not opinions, Defaqto Ratings provide consumers with an expert benchmark so that they can see at a glance how products and policies compare.

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