Words, not data, make factsheets useful

Dan Jones

The company’s research found asset managers’ factsheets contain performance data that is six weeks out of date, making them particularly irrelevant in the aftermath of a period of volatility.

Instinct has been banging this drum for some time, but connecting the tardiness of this information to the market turmoil of August appears to have made the charges stick.

I’m in two minds about this. On one level, the charges of a six-week delay are misleading. These are monthly factsheets we’re talking about: to state the obvious, the point at which the ‘out of date’ assessment is made is crucial; every factsheet is going to be at least four weeks in arrears at some point.

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In the event, Instinct conducted its research on September 10. Most fund groups provide data around the middle of the month, so there’s certainly room for improvement. But we’re talking days, not weeks here. There needs to be an acknowledgement that even fintech will have it tough when confronting small investment writing teams and the demands of compliance departments.

A further difficulty arises from investors’ differing demands. Fund houses feel they have to satisfy both the regulator’s demand for simplicity – and the 35 per cent of advisers who told Instinct the information they receive is complex or confusing – as well as the discretionary managers who want more detailed analysis.

Most significant of all is the fact that technology has long ago rendered much factsheet information an irrelevance. The rise of platforms and adviser tools such as FE Analytics mean daily data is easily accessible for those who want it. No doubt even those scathing of short-termism were taking a peek last month.

So how can asset managers ensure their factsheets don’t become entirely useless?

Given the above, I’d suggest the answer is to be found in words, not data – even if this does end up meaning more resources are required.

One example worth following is that of JO Hambro Capital Management. The firm publishes a prompt, lengthy commentary at the start of each month for its most well-known fund – the UK equity income portfolio run by Clive Beagles and James Lowen. It’s basic, features no branding or clever design, but is genuinely informative. In a quantitative age, there’s still plenty of room for qualitative analysis, too.

Dan Jones is editor of Investment Adviser