Scopic Research has added a style filter to its Multi Asset DNA reports service to help intermediaries blend multi asset funds together.
The firm said that while single strategy funds are often managed to a particular investment style such as growth, value, quality or income, there is little focus on the style biases that exist within multi asset funds.
Paul Ilott, managing director of Scopic Research, said: “They can have a significant influence on the patterns of investment returns we can expect to see under different market conditions.
“Understanding style biases can help intermediaries when it comes to monitoring performance and crucially, when it comes to blending multi asset funds together so that they can avoid compounding the same style factors that often heavily influence the investment journey.
“Relying solely on past performance to select and blend multi asset funds together can lead to wholly unintended consequences without an understanding of which investment styles might have been favoured or ignored by the market during a given period.”
Intermediaries can use the new service to filter reports, covering 120 funds from 16 fund groups, by using combinations of investment outcomes that have been designed to reflect clients’ needs across different classifications including growth, income delivery and volatility management. Intermediaries can also use the filters for likely volatility risk versus broader equity markets and methods for assessing ESG related risk as well 12 additional investment style attributes.
Scopic Research said the additional styles include themes, low correlation, aligned to manager’s view, moderate style tilts, idiosyncratic and margin of safety.
The service also includes a qualitative based portfolio blending tool designed to allow intermediaries to visualise the possible diversification benefits from combining two multi asset funds together as well as a quarterly sentiment indicator that shows the current direction of sentiment towards a broad range of asset classes.
The new reports service is available on the firm’s website.
[Main image: dustin-humes-SaWLpkDK_AI-unsplash]
