View more on these topics

Retrenching tools

A significant proportion of the gains made by all three Adviser Fund Indices in 2006 were wiped out following last week’s correction in global equity markets.

Over the week to May 17, the Aggressive AFI fell by 5.2 per cent, the Balanced AFI by 3.6 per cent and the Cautious AFI by 2.2 per cent. However, all three indices are still in positive territory this year despite the recent losses incurred.

Most major global bourses recorded modest reductions in value, ranging from a 3.8 per cent drop in Japan’s Nikkei 225 index to a 7.6 per cent fall in the German Dax index in the week to May 17. The FTSE 100 (down by 6.7 per cent), S&P 500 (down by 4 per cent) and France’s CAC 40 index (down by 6.8 per cent) were also affected.

Funds in the Aggressive AFI with exposure to commodities were among the worst performers over the period, including Merrill Lynch gold & general (down by 11.2 per cent), JP Morgan natural resources (down by 10.7 per cent) and First State global resources (down by 9 per cent).

In addition, those constituents investing in emerging market equities, notably Threadneedle Latin America (down by 11.3 per cent) and Jupiter emerging European opportunities (down by 9.5 per cent), were also heavily affected by the retrenchment in global share prices.

The relative performance of the AFIs during the equity market downturn was unsurprising, with the Cautious AFI proving most resilient. However, in the year to date, the Aggressive AFI is still the best performer, with the Cautious AFI having returned just 3 per cent.

Compared with the returns achieved by the equivalent Apcims indices and Investment Management Association managed sector averages, the three AFIs have all outperformed their benchmarks since inception of the indices in November 2004.

However, the levels of fluctuations exhibited by the AFIs are generally higher than those of their respective benchmarks.

For example, the annualised volatility of the Aggressive AFI (9.6 per cent) was greater than that of the Apcims growth index (6.9 per cent) and the IMA active managed sector (9 per cent) from November 1, 2004 to May 16, 2006, according to Financial Express.

Volatility rates were calculated using the FTSE All Share index as a benchmark.

Towry Law investment services manager Jake Moeller says: “Market volatility should not be feared by investors. Valuation levels of global stockmarkets are reasonable, with markets underpinned by reasonable earnings growth and solid company balance sheets.”

Moeller predicts that the FTSE 100 index will be around the 5,900 mark by the year end and says growth investors should respect the fact that volatility is fuelling their returns.

The Adviser Fund Index series comprises an Aggressive, Balanced and Cautious index each tracking the performance of portfolio recommendations from a panel of 18 investment advisers. For each risk profile, all panellists specify a weighted portfolio of up to 10 funds from the authorised UK unit trust and Oeic universe that, when aggregated, define the constituents and weightings of the three AFIs.


Threesixty to host mortgage seminars

Support service provider threesixty is hosting a series of mortgage seminars in June to discuss key issues, co-hosted by Abbey for Intermediaries.The sessions will include a brief overview of the mortgage market, followed by discussions on self certification, fast track, non-conforming, offset and flexible mortgages as well as buy-to-let and home information packs,Partnership Assurance will […]

Close breaks new ground

Close Fund Management has brought out a special situations fund that differs from similar funds through its focus on UK smaller companies.

Motoring on

Lender profile Guy Anker finds GMAC-RFC is optimistic after the sell-off of a majority stake in its giant parent General Motors

Japan: mid-year review and outlook

By Chris Taylor, Manager of the Neptune Japan Opportunities Fund H1 2014 Economy: after a harsh winter that slowed activity in the economy, the main event of the first half of the year has been the debate over what impact the 1 April VAT hike from five to eight per cent would have; we are […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm