Optimal portfolios constructed from the ‘FE Select 100' list of top scoring funds
FE has launched a range of model portfolios to assist IFAs in providing a valuable ongoing investment service to their clients. The new FE Select Portfolios have been built using FE's groundbreaking optimisation technology and the FE Select 100 short list of funds, representing the best available funds in each asset class.
The 15 FE Select Portfolios are designed to meet five levels of risk appetite across three investor time horizons - short, medium and long term. The portfolios maximise the diversification benefits of active funds with different strategies and styles. They aim to produce greater returns and lower drawdown than a passive portfolio with the same target risk level.
The FE Select 100 list uses FE's four quantitative ratings to effectively analyse funds from all angles: FE Crown Fund Ratings to highlight excellent funds; Alpha Manager Ratings to highlight excellent managers; FE's new Group Awards to identify groups with a specific edge in a given asset class; and the consensus view of the adviser industry from the FE AFI panel of leading IFAs.
All funds that make FE's Select 100 list are subjected to rigorous qualitative analysis from the FE Research team of experienced analysts. Their FE Select Research Reports can be used by IFAs to help communicate investment decisions to their clients.
The FE Select 100 and FE Select Portfolios are revised every six months in March and September in line with the rebalancing of FE's other rating tools. Additionally, all portfolios are subject to a thorough, ongoing governance and monitoring process.
Rob Gleeson, Head of FE Research, commented: "FE Select goes beyond identifying the best funds per asset class, but also analyses how funds interact with each other, by studying their historic volatility and correlations. Individual funds' volatility has proven to be remarkably stable over the long term and is a much better indication of future behaviour than past performance. In addition, each portfolio has an asset allocation strategy overlaid which allows us to incorporate the benefits of stochastic projections of what the future might hold. We are confident that this method of portfolio creation is superior to more traditional methods as it has the benefit of maximising diversification, minimising risk and ensuring consistency of returns.
"Unlike discretionary fund management solutions, the FE Select Portfolios keep IFAs in the driving seat. FE Research offers asset allocation and fund selection guidelines, while IFAs control the implementation, allowing them to tweak the models or fund choices to suit individual clients. The feedback we have had so far from advisers has been extremely positive."
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