Dresdner RCM Global Investors has commissioned HSBC to provide risk
ratings on its 12 investment trusts.
The ratings have been compiled using qualitative and quantitative factors.
They will be sent to investors and IFAs with all Dresdner literature from
Dresdner says it has commissioned the ratings to provide greater clarity
for investors and to allow levels of volatility to be assessed more easily.
On the qualitative side, HSBC has looked at concentration of the
portfolio, in terms of stocks and sectors, as well as mandate, gearing,
style and capital structure.
Quantitatively, the ratings look at the volatility of returns, using
historic net asset values in comparison with the FTSE All-Share index.
Of Dresdner's six conventional investment trusts, three have been given an
above-average rating, two have been classified as average and one as
slightly above average.
The zero shares of its two split-cap trusts have been given below-average
ratings, while the income shares of the JOS Holdings trust are also ranked
below average. However, the JOS capital shares have above-average risk, as
do the ordinary shares of the income growth trust.
All four of Dresdner's endowment funds have been given below-average risk
Dresdner head of investment trusts Simon White says: “There is increasing
need to provide clear independent analysis. The structures of investment
trusts have become increasingly complex over the past five years. For
example, the risk characteristics of zero-dividend preference shares issued
in the last two years are very different from those listed in the early
“It is essential that investors have the comprehensive information
available to them to make an informed decision as to whether to invest in
an investment trust – independent analysis provides exactly this.”