Fund & Sector factsheets

We supply Fund factsheets relating to each of the funds approved for use which include information on fund performance, technical details and fund management processes.

The Sector fact sheet has been developed to work alongside our Rated Fund Service and the supporting fund factsheets. It is intended to help advisers through the process of choosing an appropriate fund or funds.

We have identified a small number of funds and designated these as either ‘core’ or ‘satellite’ funds. The core funds provide general exposure to the relevant market, and the satellite funds are chosen to complement these selections by offering different investment approaches, focussing on other areas of the market or capitalisation scale, or perhaps because we believe the funds process (and/or managers philosophy/ approach) would, in our view, fit better with the satellite role.

The core funds are chosen to be used as the core holding within the sector or as the only holding for smaller investments. The weighting to the core fund(s) should be higher than to the satellite fund(s). Typically, core funds will have less bias to particular investment styles and will have generally lower volatility and stock turnover. They are more likely to be pragmatic in stock selection rather than value or growth driven. This does not mean they will be only index plus funds (although some maybe) but that we feel their process and investment history has shown they are adaptive to economic cycles and have a lower volatility and turnover philosophy overall.

Satellite funds should be used to complement the core holdings and to provide diversification. In deciding which funds to use in order to provide diversification you should consider the individual fund methodologies in order to identify funds with qualitatively different investment processes as these are likely to be less correlated. This is of course our interpretation of the way the funds should be used and may differ to fund management groups or other research analysts.

It should always be remembered that the selection decision needs to be based on a full understanding of the clients’ needs and circumstances therefore any comments and guidance we provide must be carefully considered and evaluated before refining and agreeing the client specific recommendations. Clearly any existing holdings may influence the final fund selection and should be taken into account.