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Hedge funds increasingly popular for private clients, says APCIMS

The Association of Private Client Investment Managers is changing the model asset allocation for its FTSE indices to reflect a shift towards hedge funds in private client portfolios.

FTSE APCIMS private investor indices are used as a benchmark to assess and compare the performance of income, growth and balanced funds. They are also used to review the asset allocation and structure of a portfolio and performance of discretionary fund managers.

From September 22, APCIMS will increase the weightings for the hedge funds components of its model growth and balanced portfolios from 5 to 7.5 per cent. According to the association the changes reflect a trend in asset allocation for private clients towards defensive assets in the light of sustained volatility.

UK equities will decrease from 50 per cent to 47.5 per cent in the growth index and from 45 per cent to 42.5 per cent in the balanced index. There will be no change to the income index.

APCIMS indices committee chairman Mike Lenhoff says: “We have observed an increase in weightings to hedge funds within firms’ model portfolios over the last three quarters. I would attribute this to a strategic move toward more defensive assets as portfolio managers seek to stabilise portfolio returns against the backdrop of increased volatility in equity markets”

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