View more on these topics

‘Fof charges do not affect performance’

The charges levied on funds are irrelevant compared with their performance, according to research from New Star.

Funds’ annual charges can vary but the research indicates that it is variations in asset allocation, risk-factor exposures and stock selection that affect the significant difference in performance which can be more than 100 per cent over five years.

In the global growth sector the difference in performance between the best and worst performer over three and five years is 52.48 per cent and 11.25 per cent respectively.

The difference between the New Star tactical portfolio and the worst performer in this sector over three years to June 30 is 37.77 per cent.

In the Europe ex UK sector, the difference over three and five years is 52.67 per cent and 108.39 per cent respectively.

Within the same sector the difference between the New Star European Portfolio and the worst performer over three to five years is 36.19 per cent and 47.94 per cent respectively.

Head of New Star fund of funds team Mark Harris says: “One can understand financial advisers and potential inv-estors being concerned over fund charges. But those that shy away from funds of funds because they do not want to pay the extra 1 per cent charge a year should carefully con-sider this research. It illus- trates the benefits of having a portfolio of actively man-aged funds and that selecting the best managers on an ongoing basis, with a tight rein on risk, can far outweigh the extra cost.”

Chelsea Financial Services managing director Darius McDermott says: “Getting the right fund is important, as is the quality of asset-allocation decisions. People will not mind paying a little extra for inc-reased performance.”

Recommended

Skandia writes down 86m goodwill against Bankhall

Skandia has written down a further 86m in goodwill against loss-making Bankhall, prompting speculation it is preparing to sell the business.Skandia, in its half-yearly report, says Bankhall’s earnings deteriorated during Q2 last year, announcing that the firm reported a loss of 1.36m for the first half of the year excluding goodwill charges. The report states […]

Failure to exercise could bring a fat IHT demand

Last month, HM Revenue & Customs published a discussion paper on inheritance tax and pension simplification. The stated purpose is “to seek a consensus on the detailed application of IHT law to the new situations arising under the simplified pension regime”.

Riddoch moves in shake-up

Clerical Medical financial services sales director Graeme Riddoch is moving within the HBOS group in a restructure of the intermediary division. The review was instigated by Clerical parent firm HBOS which has changed Riddoch’s former role. Clerical director of market development Keith Gilmour will take on Riddoch’s workload in the new role of director of […]

China’s economic bounce may already be over

By Mike Riddell (17 May 2016) Most people would explain the rally in global risky assets since mid-February as being primarily down to the spectacular volte-face from the Federal Reserve, where Janet Yellen (and others) dramatically toned down their narrative that the Fed would be hiking rates as many as four times in 2016. This explanation […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment