When it is not what it says on the tin…
There is a really good free tool
called “Managed Fund Analyser” that can be used by advisers and clients to review the level of volatility and risk associated with certain funds. This is a free tool provided by Skandia
, market leaders in investment platforms.
You can select from Unit Trusts, Life Funds, Pension Funds and even Offshore Funds and then select from certain ABI sectors
– typically Cautious Managed and Balanced (a couple of others too). I think pretty much all of the funds are shown (within the related categories) and this allows you (or me) to compare certain funds based upon historic data. The results are troubling.
On the whole this information adds weight to the argument in favour of passive investing
(something that we focus on with our clients) as there is very obvious evidence that the extra charges for a manager are invariably not worth the cost. In addition, the level of risk
being taken is out of sync with the original mandate that both the adviser and client thought was the case. This demonstrates the vital importance of regularly reviewing your investments…and pensions…and investment based life products.
All in all, this is a fabulous tool that Skandia have provided free of charge, but the conclusions are very concerning for investors. For example, pension funds that are alledgedly “Balanced Managed” are considerably towards the high to very high risk end of the spectrum over 3 years. This is in part due to the credit crunch admittedly, but it would do little to help an investors confidence and suggests that the Fund Manager may not be as balanced in their management as advertised.
We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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