Research firm rolls out revamped fund factsheet

Research firm rolls out revamped fund factsheet

Research company Pure Group is hoping its version of a fund factsheet, which goes live this week, will revolutionise how advisers analyse and select funds for clients.

The company, headed up by Ben Bird and Patrick Murphy, has created more than 3,000 Pure Overview Documents - or PODs - a version of a factsheet but with what it deems to be vastly improved data.

The duo behind the company sees the PODs as helping advisers in terms of compliance requirements but also believes they will assist in discussions with clients.

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The documents will be available from this week through Funds Library, which can be accessed via by advisers via fund platforms such as Cofunds and FundsNetwork. The documents can also be requested from Pure Group directly.

The PODs not only score a fund in terms of its historic profile but also provide a Forward Perspective Rating as to how a fund might perform in the coming 12 months amid the expected macroeconomic conditions, such as rising or falling inflation and expected moves in interest rates.

This part has been developed with Parala Capital’s managing partner Steven Goldin and two of its founding partners, finance professors Allan Timmermann and Russ Wermers.

Mr Bird, who previously worked at Morningstar OBSR from 2009 until last year and Standard & Poor’s Fund Services before that, said the aim was to help advisers understand how funds would perform in varying macroeconomic conditions.

“What we are trying to do is help advisers understand that really important things out there such as the macroeconomic environment which have an impact on the future performance of investment funds,” Mr Bird said.

“We are really meeting advisers’ needs for a whole-of-market service, which is systematic, repeatable and compliant.”

Mr Murphy, whose background includes working in the institutional investment market, said he wanted to help bring some aspects of how that part of the industry analysed funds to the retail world.

“On the retail side the analysis seemed to be just fundamental past performance and very little forecast modelling looking at how investments might perform in certain circumstances.”

Elsewhere on the POD, data shows each fund’s returns in pounds and pence in the past three years compared to cash adjusted for inflation, which the group said would help advisers show clients what the returns have been in real money.

Rather than simply quoting linear investment performance, Pure Group’s POD breaks down the fund’s performance into market cycles to show how it has weathered bull and bear markets and, importantly for Mr Bird and Mr Murphy, whether this is in line with expectations.

An example POD shows the £3.3bn Threadneedle UK fund lost 5 per cent between July 2007 and June 2010 covering the credit crisis, a loss likely to be less than some of its competitors. Between July 2010 and June 2013 it rose 47.3 per cent.

In keeping with the post-RDR environment, each fund compared by Pure Group to a universe of relevant, open- and closed-ended funds as well as exchange traded funds.