View more on these topics

Now the FSA tells the public to ignore funds&#39 investment strategy

The FSA has been heavily criticised by IFAs and fund managers for warning investors using its comparative tables not to consider investment process when choosing a fund.

They claim that the regulator&#39s move is irrespon-sible as the process used is often an essential element in making an investment decision.

In an accompanying note to the tables entitled, More about investment strategy, the FSA says investment process is not a reliable way of selecting investments because there is a risk that fund managers may move on or the firm&#39s investment process may be altered by a merger or acquisition.

Instead, the note encourages investors to consider only geographical weightings and differing asset allocations, which it says is what “determines the risk and return profile of the fund”.

It says: “Investment strategy is how some fund managers differentiate themselves from other fund managers. This is not a wholly reliable method of selecting investments, as individual fund managers change from time to time.

“Also, some fund management groups are owned by another company, possibly based overseas. Ownership can and does change and this might have an impact on the investment policy of the firm.”

But fund managers and IFAs have hit back, saying investment process is central to fund selection.

Hargreaves Lansdown head of research Mark Dampier says: “If you look at a company like Liontrust, investment process is at the centre of their business. I agree with the FSA that the process might change but it is still crucial.”

Liontrust marketing director Jonathan Harbottle says: “For the FSA to be saying you should not look at the investment process is irresponsible.

“The way that the fund is run is utterly key to investment selection.”

Recommended

Skipton ropes in growth

Skipton Building Society has brought out another tranche of its five-year guaranteed growth bond that is linked to the FTSE 100, S&P 500 and Eurostoxx 50 indices.The bond guarantees the return of the original capital, plus a minimum return of 22 per cent regardless of what happens to the indices. The maximum potential growth is […]

Britannic set for second service at Eastbourne

Britannic Asset Management is to sponsor the ladies international tennis tournament at Eastbourne for the second time this summer.The grass court tennis week, which is seen as a warm-up for Wimbledon, runs from June 15 to June 22.Sales & marketing director Francis Ghiloni says:”We were delighted with the success of our first year as title […]

Good neighbours can seal a house deal, says the Woolwich

Location is the key factor for first-time buyers when choosing a home, according to a survey by the Woolwich.The second Woolwich First Time Buyers Survey of 100 people around the UK found that location clinches the sale for 39 per cent of buyers.Quiet neighbours are the top attraction for 14 per cent while 40 per […]

Investment view

The banks&#39 reporting season promises to be of even greater importance than usual. The banks are the biggest single component of the FTSE 100 Index, accounting for 22 per cent of the market capitalisation of the UK&#39s premier benchmark. This index has been stuck in a narrow trading range. Technical analysts believe it is building […]

thumbnail

What employers should expect over the next five years

A major feature of our articles is looking into the Jelf Employee Benefits crystal ball to predict changes and trends that may influence the short and medium term shape of UK employee benefits.  By flagging such changes early we aim to provide our followers with the tools to make sensible and informed decisions on their benefits offerings.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment