All AJ Bell funds found to offer good value in AoV report
Performance of funds 'highly credible'
All seven of AJ Bell's funds were found to deliver good value for investors, according to the firm''s inaugural Assessment of Value (AoV) report.
The AoV, which focused on the VT AJ Bell ICVC range, used a traffic light assessment system based against the seven criteria implemented by the Financial Conduct Authority (FCA) in the wake of its 2018 Asset Management Market Study.
These included performance, fund cost, economies of scale, comparable market rates, comparable services, classes of units and quality of service. Each of the funds were also given an overall rating.
The VT AJ Bell Cautious, Moderately Cautious, Balanced, Moderately Adventurous and Adventurous fund of funds all received green lights across each criterion, which indicates good value.
The value of value assessments: What next for AoVs?
The £38.2m VT AJ Bell Global Growth fund achieved a green light in every category except performance, which is "being monitored and no remedial action is required", according to the firm, although if performance does not improve as global equity markets recover it will "assess what action needs to be taken".
The VT AJ Bell Income and Income & Growth portfolios were awarded a green light across all criteria other than performance which is not yet applicable, given their performance track records are too short. The funds were both launched in April 2019.
Mark Gillan, AJ Bell's head of operations, said overall they consider the performance of their funds to be "highly credible", with each vehicle other than Global Growth residing in the top two quartiles relative to the average peer in their respective sectors on "all time horizons".
"Global Growth operates a specialist mandate, focusing on higher risk investments such as in Asian equities, emerging markets, robotics and technology," he explained.
"When compared against the broader IA sector performance, it is therefore likely to look good in upward trending markets and poor in falling markets."
He added that, within the IA Flexible sector - which is where the fund resides - funds have a "considerable flexibility over what to invest in" which means there is no minimum or maximum requirement for investment in equities.
"Given the fall in equity markets since the launch of Global Growth we are comfortable with its performance sitting in the third quartile of the IA sector," Gillan continued.
"We have a number of internal measures to monitor the fund's risk and performance, and it continues to perform in line with stated objectives."
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