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Adviser Fund Index

The 18 Adviser Fund Index panellists have the opportunity to revise their portfolio recommendations from May 1. This will be the fifth rebalancing of the AFI series, with the other six-monthly rebalancing point coming on November 1.

The AFI panellists must decide whether to change their current portfolio selections for the three indices, based on how their individual fund choices and overall asset allocations have performed in the past. They can select up to a maximum of 10 funds for each AFI portfolio and weight them according to their requirements.

Since inception of the AFI series on November 1, 2004, all three indices have performed well. The Aggressive AFI is up by 57.7 per cent from November 1, 2004 to April 4, 2007, according to Financial Express, while the Balanced and Cautious indices are up by 48.5 per cent and 35.8 per cent respectively.

All three indices have also outperformed their respective Apcims indices and Investment Management Association managed sector averages. For example, total returns from the average IMA active managed fund (up by 46.4 per cent) and Apcims growth index (up by 43.3 per cent), were well below the Aggressive AFI over the period. The riskiest AFI has also outperformed the FTSE All Share index to date.

Performance has been consistent, with the three AFIs having beaten these benchmarks in three out of the four six-month periods since inception. Indeed, each index has also come out on top so far this season from November 1, 2006 to April 4, 2007.

The volatility levels of the three AFIs show that outperformance of the indices has been achieved through a higher-risk approach from the 18 panellists. The annualised volatility of the Aggressive AFI over the period November 1, 2004 to April 2, 2007 was 9.9 per cent, according to Financial Express. Not only was this higher than the IMA active managed sector average (8.93 per cent) and Apcims growth index (6.81 per cent) but it also eclipsed the volatility of the FTSE All Share index (7.51 per cent).

Focusing on more recent performance from the underlying AFI constituents, the best performing funds are in the IMA’s global emerging markets and specialist sectors while funds in the Japan sector have generally had a negatively impact on performance over the last sixand 12-month periods.

With a total return of 36.6 per cent, the Neptune Russia & Greater Russia fund is the top performing AFI constituent over one year to April 4, 2007. Gartmore China opportunities comes out on top over the six months, returning 35.6 per cent. At the bottom of the tables over both time periods is Legg Mason Japan equity, down by 49.8 per cent over the last year.


Big firms maintain Sipp stranglehold

Specialist Sipp administrators and insurance companies will continue to battle it out for the majority of self-invested personal pension business, according to research from Defaqto.It shows that specialist Sipp administrators and trustee companies hold 47 per cent of the market while insurance companies hold 24 per cent.IFAs, investment managers and stockbrokers trail behind with 8, […]

Shredded surplus

Until recently, I had always thought the Investment Management Association was a more up to date trade body and one that the ABI should considering copying.


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