THE GATEKEEPERS STUDY Unlocking the Secrets of Fund Research 2017

Transcription

1 THE GATEKEEPERS STUDY Unlocking the Secrets of Fund Research 2017

2 Gatekeeper /ˈɡeɪtkiːpə/ 1. an attendant employed to control who goes through a gate 2. A person or thing that controls access to something 3. An orange and brown European butterfly

3 THE UK FUND INDUSTRY Assets Q117: 997bn 2010: 567bn Q107: 444bn 10-year growth: +125% Net sales 2016: 20bn Last five years: 62bn Last 10 years: 146bn

4 GATEKEEPERS Fund managers (direct) Gatekeepers 50-70% Wholesale channels Life & Pension COs Platforms 60% Primary channels IFAs ~70-75% WMs ~13% Life & Pens COs ~5% D2C p/forms >8% Banks etc <1% Investors <1% Source: Fundscape

5 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 THE SIZE OF THE PIE Platform AUA (Mar 2017): 520bn Gross platform sales in 2016: 94bn Net platform sales in 2016: 38bn Q117 FOFs Pref fund deals MPs & CIPs Total platform sales 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Source: Fundscape

6 1,600 1,400 1,200 1,000 THE SIZE OF THE FUTURE PIE Pessimistic CAGR to 2021: 18% Realistic CAGR: 22% Optimistic CAGR: 24% 1.5trn 1.2trn 894bn Pessimistic Realistic Optimistic Source: Fundscape estimates

7 ADVISER RISKS Platform due diligence Risk and return assessment Whose asset allocation process? Analysis and manager selection Monitoring and reporting benchmarking, charges, VFM 7

8 ASSET ALLOCATION Risk profile 5 OMW 5 DT 5 Cash 45% 0% Bonds 0% 35% Property 0% 7% UK equity 8% 26% Global equity 47% 32%

9 HOW ACTIVE IS ACTIVE? Active share Diversified stock- picking 50% Concentrated stock- picking 7% Trkrs 11% Closet trackers 32% yr tracking error Factor bets 0% Source: Morningstar, Cremers & Petajisto (2009), gbi2

10 UK EQUITY ACTIVE # funds % 11% 12% 13% 14% 15% 16% 17% 18% 19% 20% 21% 22% 23% 24% 25% 26% 27% 28% Red band = FTSE All Share performance. Source FE, gbi2 Annualised returns

11 SELECTION CRITERIA How to select if past performance is not a criterion? Benchmarking No more suits you sir comparators VFM Cost of management goes on researchers checklist Unit price of active share benchmarks fund AMC Qualitative assessment selectivity process

12 ADVISER RISK Assessing suitability Risk assessment and discussion OUTSOURCING IS NOT EASY Design the portfolio to match Asset allocation process Manager selection Monitoring and analysis Reporting 12

13 WHO ARE THEY? RATINGS AGENCIES D2C BUY-LISTS ADVISER BUY-LISTS DFMs

14 METHODOLOGY Assumptions Total IA universe plus FCA-authorised funds Two cohorts: listed and unlisted Metrics Alpha and beta v sector Volatility OCF AUM, PTR, Fund life, manager tenure Sales Performance Balance ratio TM

15 UNIVERSE Investment Association universe: 3,626 FCA-authorised foreign funds: 5,189 1,161 listed funds from IA universe 448 listed FCA-authorised funds 198 fund groups Listed cohort represents 18% of investable universe and 32% of IA universe

16 COMMON DENOMINATORS ACROSS GATEKEEPERS Positive alpha in the previous 3 years and current year Track record of five years Fund manager tenure of > 4 years Assets > 200m Asset growth evenly split between sales and performance (SPB ratio) = FUNDSCAPE FACTORS

17 TOP FIVE GATEKEEPERS BY 10-YEAR RETURNS 1. ISA Ltd Star Managers 2. Bestinvest Best of Breed 3. ISA Ltd Growth Portfolio 4. Brooks Macdonald 5. Axa research fund range - Showcase

18 MOST CONSISTENT PERFORMERS By returns over one, three, five and 10 years ISA Ltd Growth portfolio Bestinvest - Best of Breed

19 TOP FIVE GATKEEPERS BY FUNDSCAPE FACTORS 1. Fundscape Frontier Funds 2. Bestinvest Best of Breed 3. Investment Adviser 100 Club 4. HL Wealth AJ Bell Favourite funds

20 TOP FUND GROUPS Q Q Schroders 2. Fidelity 3. Invesco 4. M&G 5. Jupiter 6. Henderson 7. Old Mutual 8. Col Threadneedle 9. BlackRock 10. Standard Life Funds # Apps 1. Fidelity Schroders OM BlackRock Jupiter Invesco M&G Col Thread Henderson Artemis

21 TOP FUNDS # PICKS Q Q Stewart Asia Pac Leaders 2. BlackRock Gold & Gen 3. Artemis Income 4. Axa Fram UK Sel Opps 5. M&G Optimal Income 6. Newton Global Income 7. Jupiter European 8. IP Corporate Bond 9. OM UK Alpha 10. FS Global Listed Infras. 1. Stewart Asia Pac Leaders 2. Woodford Equity Income 3. Fundsmith Equity 4. Jupiter European 5. Schroder Tokyo 6. Liontrust Special Sits 7. Artemis Global Income 8. M&G Optimal Income 9. Threadneedle Uk Eq Inc 10. Artemis Income

22 SELECTION FACTORS TO GET YOU NOTICED

23 Five key conclusions Blah blah CONCLUSIONS

24 HOW WE CAN HELP FUND GROUPS Provide an ongoing review of fund selectors in the market and how well they have performed Outline the critical success factors for being selected in this challenging environment Provide you with valuable competitor insight, allowing you to monitor your peers and benchmark your progress Equip you with the necessary tools to help challenge fund selections and entrenched positions on lists

25 INTERACTIVE DATA Search by fund group

26 Search by fund INTERACTIVE DATA

27 Search by gatekeeper INTERACTIVE DATA

28 Search by sector INTERACTIVE DATA

29 HOW WE CAN HELP Gatekeepers Report plus full data set 4000 Quarterly analysis (annual data packages) 2,000 Bespoke analysis DISCOUNT CODE: SUMMER SPECIAL

30 IN THE FUTURE More gatekeepers Feedback from fund groups Feedback from intermediaries Testing service

31 THANK YOU