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Adviser Fund Index
Quiet revolution tempts retail firms
The growth of emerging market debt and equity funds run by institutional firms over the past decade has led to a boom as groups in the retail arena scramble to launch “me too” products.
Diversify portfolios to boost yields
Investors should be seeking yield from a combination of corporate bonds, high yield and more value-based equity income strategies, casting their nets overseas and checking risk tolerance.
Tempted to tinker but holding firm
A lot can happen in six months – the period between AFI rebalancings. Two panellists look at the pain they might have avoided and what they might do at the next opportunity for change.
Will there be just too much to know?
Many advisers are uncertain what the call for “whole of market knowledge” will mean for them under proposed new rules, and some experts expect IFAs to avoid structured products altogether.
Name change helps clear the view
The renaming of the former IMA Cautious Managed sector more accurately reflects its nature but classifications in the sector as a whole still require a greater degree of scrutiny and clarity.
Volatility and a tale of two horizons
Analysis of the FE AFI indices over two timeframes – five years and three years – reveals both similarities and striking differences in which erratic markets have played an important part.
Arbitrary data offers blurred picture
Neither short nor long timeframes offer certainty for the analyst, but despite market vagaries, data can offer useful insights, which helps advisers match products to investors’ risk appetite.
Is it time to throw caution to the wind?
Recent rounds of quantitative easing by the Bank of England and the European Central Bank’s long-term refinancing operations mean the case for a risk-on trade may be growing. With central banks maintaining their use of extraordinary monetary policy to avert recession or, worse, a deflationary spiral, the value of a cautious stance may continue to be eroded.
Tailwind builds behind risk assets
After the flight to safety that began last year, the value of a cautious stance may be increasingly eroded as central bank policies such as quantitative easing encourage a return to risk-on trade.
Clarity on fees need not mean parity
The approach of the new regime has sparked calls for more transparency on fees. While there is agreement on this, there is also a view that superior products should command higher charges.
Bulls stampede to Brazil and China
Investors adopt a bullish stance on emerging markets in general and Brazil in particular, where rising commodity prices, structural reform and inward investment have boosted economic growth.
FE Adviser Fund Index
Investors would have lost money in real terms if they invested in an average cautious managed fund in the past five years.
Where can the cautious go but cash?
Cautious investors have seen their capital eroded over the past five years, and with defensive strategies still likely to underperform, there are signs that an appetite for risk is returning.
Risk muddies fixed income waters
The troubled financial climate challenges the view that some fixed income investments are risk free, and some investors may find the promise of “safe” returns on government debt unrealistic.
Uncertainty prompts pursuit of yield
Panellists jettisoned absolute return funds when they failed to deliver in the wake of the slump in 2008. All three indices have a bias towards strategic bond funds and favour yield over growth.
Bric path beckoning as West limps
With prolonged stagnation likely for the West, the appeal of emerging markets - particularly the Bric nations - is growing. Some consider the Brics widely underheld, despite their volatility.
Have we simply had enough gloom?
Economic news in the fourth quarter was bad, and things are little better now, yet fund manager sentiment has shown a clear uplift. One panellist suggests it is because “people long to be bullish”.
Swingtime on the money-go-round
Currency risk is back on the agenda, as demonstrated by Hungary’s predicament. With markets still volatile, ’safe’ currencies such as the Swiss franc are likely to continue to trade at a premium.
A little short of absolutely fabulous
While many investors in absolute return products may have no regrets, some AFI panellists are unimpressed by the funds’ apparent struggles in markets they were designed to protect against.
New picks to keep the stream steady
An income theme is clearly evident among the 33 funds that made FE AFI debuts in November. New dividend-paying funds include equities and bonds and range across the globe in exposure.
