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Rebalancing sees return to property

This month’s rebalancing brought a cut in the number of individual funds and fund providers in the AFI, a drop in UK equities’ exposure and a cautious re-entry into property funds.

The total number of funds across all three indices fell from 169 to 161 this month.

All three indices saw a reduction individually, with the Aggressive experiencing the biggest drop of 11 funds, from 114 to 103.

The Balanced index fell from 116 to 110, while the number of funds in the Cautious index dropped from 100 to 97.

The number of fund providers overall in the AFI also fell from 53 to 51.

The previous rebalancing in November also saw a reduction in the number of individual funds, from 182 in May 2007 to 169 in November. The number of fund providers fell from 58 in May 2007 to 53 in November.

This month, there were 32 new fund entrants in total, while 40 funds were ejected.

In contrast, the May rebalancing of 2007, season six, saw the number of funds in the AFI increase by 13. The fund that occurs most overall in this season’s rebalancing is the BlackRock UK absolute alpha fund.

In terms of management groups, two were added to the AFI this month, Insight Investment and Lazard Fund Managers, while four fund groups were ejected. These were Credit Suisse Asset Management, GAM Sterling Management, Threadneedle Investors and Troy Asset Management.

In terms of sectors, allocation to financials fell by 3 per cent in each of the indices. In the Cautious AFI, Other fixed interest increased the most, rising by 6 per cent after falling 9 per cent in November’s rebalancing.

In the Balanced AFI, allocation to fixed interest increased the most with a rise of 10 per cent after falling by13 per cent in November.

Meanwhile cash saw the biggest increase in allocation within the Aggressive AFI, with a rise of 5 per cent.

In terms of allocation changes, exposure to UK equities fell the most across all of the indices. It fell by 4 per cent in the Aggressive AFI, 6 per cent in the Balanced and 4 per cent in the Cautious. Exposure to Other International Equities increased the most, with a 3 per cent increase in the Aggressive and Balanced AFIs and by 2 per cent in the Cautious.

In the Balanced AFI, exposure to North American equities also increased by 3 per cent.

Other shifts include a cautious re-entry into property in all three AFI indices. The AFI rebalancing in November saw direct exposure to property funds cut to 0 per cent, although some exposure to property was retained through multi-manager funds. Now direct exposure to property funds is 3 per cent in the Aggressive, 4 per cent in the Balanced and 5 per cent in the Cautious.


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