Rathbones CEO: Risk-targeted funds make managers work harder

Rathbones' chief executive Mike Webb, a long-time proponent of risk targeted investments, has said the method makes fund managers work harder for investors.

Risk-targeted funds' main aim is to only expose investors to a specified, and constant, amount of risk. This compares to risk-rated offerings, which assign a risk number to a fund based on a ‘snapshot' of its potential level of volatility, that is not guaranteed and is liable to change. Research commissioned by Rathbones suggests around a third of advisers are still unsure of the differences between risk-rated and risk-targeted funds. For Webb (pictured), the key variance is in how the two strategies allow managers to behave. "Risk targeting imbues a discipline [in managers] to ...