The Balanced index’s exposure to IMA Asia Pacific including Japan was removed entirely following the ejection of Aberdeen Asia Pacific and Japan and Invesco Perpetual Pacific. In the Japan sector, Legg Mason Japan equity, Neptune Japan and Old Mutual Japanese select all left the benchmark.
Odey Japan was the only Japanese equity product to be added to the Balanced AFI after it was selected by one adviser.
Europe excluding UK, UK all companies and active managed all made net gains of two funds. The active managed sector was a new addition to the index, with Cazenove multi-manager managed equity and M&G managed growth both selected.
The £40m Cazenove fund of funds, launched in May 2002, is run by Mark Harries and Simon Wood.
The index experienced high levels of turnover during the rebalancing, with 21 (18.8 per cent) of the 112 previous constituents ejected in May. This compares with 18 out of 103 funds (17.5 per cent) last November. How-ever, the overall asset allocation was largely unchanged.
Exposure to British equities rose by two percentage points, with continental European and Asia pacific shares making gains of one percentage point.
F&C’s £300m strategic bond portfolio, run by Fat-ima Luis, was added to the index, marking the group’s return to the AFI after a six-month absence.
However, the arrival of the fund was not enough to prevent an overall one percentage point drop in the fixed-interest allocation. Several bond funds were ejected from the Balanced AFI, including Baillie Gifford high-yield bond and Standard Life glo-bal index-linked bond, both selected by one adviser last November.
Standard Life Investments lost three funds in total, the most of any group. However, the firm’s £240m UK equity unconstrained portfolio was added to the index, leading to a net loss of just two funds. Jupiter also lost two portfolios after the panellists ejec-ted the firm’s distribution and global managed funds.
M&G, Rathbone and Resolution Asset Management all made net gains of two funds. Rathbone was previously not represented in the Balanced AFI. Artemis remains the most popular group in the index when measured on a funds multiplied by weightings’ basis, followed by M&G and Invesco Perpetual.