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Defaqto and Prudential launch risk guide

22 March 2018

Defaqto and Prudential have joined forces to launch a guide to multi-asset risk bound fund families. 

The document is designed to help advisers identify the different ways in which the multi-asset fund universe can be broken down and understand what risk bound multi-asset funds are, how they work, how they can be used and how their sub-set risk targeted market has grown in recent years.

In addition, the guide aims to highlight how risk bound funds can be rated from both a quality and suitability point of view, and enable advisers to understand the benefits of risk bound funds to advisers and their clients.

These funds exist as families, as typically four or five funds are run by the same fund management team and follow the same investment process, but with expected return and risk for each fund increasing across the family.

Pan Andreas, head of insight for Funds and DFM at Defaqto, said: “For the investor, the benefit of these types of funds is their simplicity, as it is possible for a client to invest in the same family of funds throughout their investment lifecycle. However, there can be significant differences in structure, process and other features across the various risk bound fund families in the market, so due diligence is still very important – such funds need to be monitored to ensure they are meeting their client’s aims and objectives on an ongoing basis.

“We designed this guide to help advisers identify the factors to consider in their advice process and how to mitigate some of the issues and risks involved.”

The document is accredited by the CII/PFS and CISI for up to 60 minutes of structured CPD.

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