Distribution Technology (DT) has launched a service designed to allow financial advisers to more easily distinguish and compare risk-targeted funds.
The firm has developed a dynamic planner risk target managed (RTM) badge, which will only be awarded to funds that fulfil a set of five criteria designed to test their risk-targeted credentials.
The criteria include the requirement that fund’s “expected volatility is targeted to stay within the boundaries assigned to each dynamic planner risk profile” or that the fund “targets the strategic asset allocations for the respective dynamic planner risk profile”.
Other criteria include the need to have “suitably diversified exposure” to at least six asset classes, the underlying asset class exposure must be “managed in a suitably diversified manner” and that “derivative exposure is managed in the main for the purposes of efficient portfolio management”.
Funds that match these criteria and have a dynamic planner risk profile of between 3 and 8 will now be eligible for the RTM badge and will be positioned seperately with DT’s search engine.
At launch, the RTM moniker has been given to 49 multi-asset solutions, managed by nine different asset managers, with combined assets under management of £2.4bn.
DT said it would offer asset managers a consultancy service to assist them in staying aligned with the RTM criteria.
If asset managers deviate from the risk target, DT said it would allow thethree months to realign the portfolio, after which it will be placed under review and the RTM badge removed.
