Assessment of Value
Transcript of Assessment of Value
Letter from the Board ................................................................................... 4
Introduction .................................................................................................... 5
Solution Fund Summaries ...........................................................................7 AdventurousSolutionFund ...................................................................................................................... 8 BalancedSolutionFund ............................................................................................................................. 9 CautiousSolutionFund ............................................................................................................................ 10 DefensiveSolutionFund ........................................................................................................................... 11 DiscoverySolutionFund .......................................................................................................................... 12 DynamicSolutionFund ............................................................................................................................ 13 StrategicSolutionFund ............................................................................................................................14
Multi-Manager Fund Summaries ............................................................ 15 Multi-Manager Global Real Estate Securities .................................................................................... 16 Multi-ManagerInternationalEquity ...................................................................................................... 17 Multi-ManagerUKEquityFocus ...........................................................................................................18 Multi-ManagerUKEquityIncome ........................................................................................................ 19 Multi-ManagerUKEquityGrowth .......................................................................................................20
IPS Fund Summaries ................................................................................... 21 IPS Growth Portfolio ................................................................................................................................22 IPSIncomePortfolio ................................................................................................................................ 23 IPSHigherIncomePortfolio ..................................................................................................................24
Other .............................................................................................................. 25 Asset Allocator Fund ................................................................................................................................ 26
Glossary ........................................................................................................ 27
Contents
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ASSESSMENT OF VALUE REPORT
SincelaunchingourbusinesslastDecember,ourkeyfocushasbeenourclients.Placingyourneedsattheheartofeverythingwedoisourpriorityandwe’recommittedtodeliveringtheresultsyoushouldexpect.
Oneofthefirstthingswedidasabusinesswastotakeoverresponsibilityfor16fundspreviouslymanagedbyScottishWidowsUnitTrustManagersLimited(SWUTM).Sincethenwe’vebeenworkingwithournewinvestmentadviser,SchroderInvestmentManagementLimited(SIM),tolookathowwecanimproveinvestmentperformance.
Today we’re publishing our first Assessment of Value. This assessmentfollowsnewrequirementsfromourregulator,theFinancialConductAuthority(FCA).Wewelcomethisinitiativeas it’sdesignedtostrengthengovernanceandtransparencyforyouas a client of our funds.
Wehopethefindingspublishedinthisreportandfuturereportswillgiveyouconfidenceinourabilitytoproviderobustoversightandeffectivemanagementofourfunds.
Howweapproachedtheassessment;We’rekeentodemonstratetransparencyineverythingwedo.Forafairandtransparentassessment,weaskedindependentspecialiststohelpusreviewhowourfundsfaredagainstthesevencriteriasetoutbytheFCA:
• Performance• AuthorisedFundManagerCosts• Economies of Scale• ComparableMarketRates• ComparableServices• ClassesofShares• QualityofService
Someofthesecriteriarequireustocomparethefundstosimilarfundsmanagedbyotherassetmanagers(knownasapeergroup).TodothisweusedfundcategoriesdefinedbyMorningstar,anindependentfinancialresearchcompany.WealsousedMorningstardata for the comparisons.
The data for this report was collected on 30 June 2020. At this point we’d been responsible for day-to-day management of the funds for sevenmonths,butthereportassessesvaluebothforthisperiodandfurtherbacktowhenScottishWidowsUnitTrustManagersLimited(SWUTM)providedoversightandmanagement.
Whattheassessmenttoldus;Theassessmentshowedthat,overall,our16fundsaredeliveringvaluebutthereareareasforimprovement.
Acrossthe112individualcriteriaweidentified:
• 79areaswherewe’redeliveringvalue• 29areaswhereimprovementswererequired,
andwe’vealreadytakenaction• 4areaswherewehaveenhancedoversight.
Performance;Onthewhole,one,threeandfiveyearperformancehasnotbeenasgoodaseitherthebenchmarkorthepeergroup.TheBoardisdisappointedinthisasitisnotwhereyouwouldexpectour funds to be. This meant performance was identified as one area thatneedsimprovingacrossallthefundsandweknowthissubjectisreally important to you.
Ournewinvestmentadviser,SchroderInvestmentManagementLimited(SIM),isoneoftheleadingassetmanagersintheUnitedKingdomwithastrongclientfocustodeliverpositiveoutcomes.
Workingwiththemmeanswecanbenefitfromtheirextensiveanalytical resources and the economies of scale that come from being asignificantinvestmentmanager.Itgivesusconfidencethatwecandeliverthelong-termrisk-adjustedreturnsyouexpect.Andwhilethelastsevenmonthsistooshortawindowtoreallyassesswhatwe’reachieving,wehopetheappointmentofournewinvestmentadviserprovidescomfortthatwe’reheadedintherightdirection.
AuthorisedFundManagerCosts; The assessment showed that the charges associated with running the funds are appropriate and fair. We’llcontinuetoreviewchargesacrossallofourfundrangestoensuretheyremaincompetitiveandappropriate.
EconomiesofScale;Theassessmentshowedthat,generally,asassetshaveincreasedinourfunds,theOngoingChargesFigure(OCF)hasreduced.Thisisacleardemonstrationofhowwe’vepassedonanyeconomiesofscaletoyou.Theassessmenthighlighted,however,theCautiousSolutionfund,DefensiveSolutionfund,DiscoverySolutionfundandtheMulti-ManagerUKEquityFocusfundasnotdeliveringeconomiesofscaleasefficientlyaswewouldhaveexpected.
ThesefundsarenowunderenhancedoversightandtheBoardhasinstructed for a detailed action plan to be presented.
ComparableMarketRates;The assessment showed that our investmentchargesarebroadlyinlinewiththepeergroupacrossall16 funds.
ComparableServices; This does not apply to our fund ranges as they arenotavailabletootherclients(forexampleinstitutionalclients).This means it does not feature in our assessment.
ClassesofShares;Weidentifiedthatfeesfortheretailshareclasses(classAshares)oftheAssetAllocatorfund,SolutionsfundsandMulti-Managerfundswerenotconsistent.WehavetakenremedialactionandreducedtheAnnualManagementCharge(AMC)ontheseshare classes.
QualityofService;Welookedattheoverallexperienceweandoursuppliersprovidetoassesswhetherornotthiswasinlinewithwhatyoushouldexpect.Theassessmentconcludedthattheydoprovidevalue.
Werecognisetherearealwaysopportunitiesforimprovementandwewillcontinuallystrivetomeetyourexpectations.Forexample,inNovemberweareintroducingaClientAdvisoryBoardwhichwillenableclientstohaveregularinputontheserviceweprovide.We’recommittedtoimprovingourservicesandyourfeedbackis the best way to understand where we could be doing better. Wewillalsobeenhancingourdigitalcapabilitiestoimprovetheserviceweprovideyou.
You can find out more about our conclusions in the body of this report.
Letter from the Board
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ASSESSMENT OF VALUE REPORT
Marcus Brookes ChiefInvestmentOfficer
Introduction
1. Performance2. Authorised Fund Manager Costs 3. Economies of Scale 4. Comparable Market Rates 5. Comparable Services 6. Classes of Shares 7. Quality of Service
It is the responsibility of the ACD Board to apply effective oversight and to challenge the assessments. To ensure this oversight is rigorous and impartial the Board includes independent non-executive directors.
To add further independent analysis and to ensure we took a robust approach to assessing value, we also called on the experience of Broadridge Financial Solutions, an external third party.
How we assessed value based on the FCA’s criteriaPerformanceWe have compared each fund’s performance against its peers to 30 June 2020. Performance data was sourced from Morningstar and we identified the peer group based on each fund’s asset allocation, objectives and risk profile. All funds within the corresponding Morningstar category were included for comparison.
We also looked at each fund’s current risk profile relative to its investment objective to determine if its absolute performance was in line with what we would expect.
Authorised Fund Manager CostsWe looked at each element of the funds’ costs and the cost of providing the service which make up our Ongoing Charges Figure (OCF).
Economies of Scale We reviewed the size of each fund relative to its ongoing charges. We then looked at whether our purchasing power – our size and reputation – could have achieved lower costs or a better quality of service for the same cost.
Comparable Market Rates We looked at the fees we charge our clients for investing in our funds and compared them to the fees for the other funds within the comparison group.
Comparable Services For each fund we reviewed if we offer alternative funds with a similar mandate within Scottish Widows Schroder Personal Wealth (ACD) Limited. If we did, we asked ourselves if the fees were comparable.
Classes of Shares We reviewed all share classes within each fund to identify whether any of them were more expensive than other classes similar funds that we manage.
Quality of ServiceWe looked at the overall client experience. For example, whether the funds have ever breached their investment guidelines, the level of operational errors (if any), and the number of client complaints. We reviewed not only the services provided by us, but also those from external providers including the Depositary, Custodian, Auditor, Investment Adviser, Transfer Agent and Fund Administrator. For external companies we also considered the level of fees relative to the service provided, whether they have the resources to support our business, and whether they respond to our queries in a timely fashion. We reviewed all key performance indicators that affect our clients to make sure they were in line with expectations.
The FCA has introduced new rules requiring us to review and analyse our funds annually to ensure each fund provides value to our clients. It has identified seven areas (“criteria”) that we should consider:
5Pastperformanceisnotaguidetofutureperformance.Investmentvalueandincomefromitmayfallaswellasrise, asaresultofmarketandcurrencymovements.Youmaynotgetbacktheamountoriginallyinvested.
ASSESSMENT OF VALUE REPORT
ASSESSMENT OF VALUE REPORT
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Areasdeliveringvalue Areaswhereimprovementwasrequiredandactionhasbeentaken
Areaswhereenhancedoversightisinplace
Summary of resultsTheresultsforeachcriteriabyfundisillustratedinthefollowingdiagram:
Solution Funds Multi-Manager Funds InvestmentPortfolioServiceFunds(IPS) Other
Adventurous Balanced Cautious Defensive Discovery Dynamic StrategicGlobal Real Estate
International Equity
UK Equity Focus
UK Equity Growth
UK Equity Income
Growth IncomeHigher Income
Asset Allocator
Performance ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Authorised Fund Manager
Costs● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Economies of Scale ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
ComparableMarketRates ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
ComparableServices ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
ClassesofShares ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
Quality of Service ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ●
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AdventurousSolutionFundObjective:Toprovidecapitalgrowththroughinvestmentinotherfunds, toprovideexposuretoarangeofdifferentassetclasses.
Performance TheAdventurousSolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning. This has beenduetoboththedecisionsabouthowtheinvestmentswerespreadacrossdifferentassetclasses,andtheperformanceoftheindividualfundsithasinvestedin.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociated with running the fund are appropriate and fair.
Economies of ScaleTheAdventurousSolutionfundhasdemonstratedeconomiesofscalethroughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanitspeersalthoughthefundismuchsmallerinsize.Onthewhole,ourratesarecomparablewiththemarketaverageandthereforedemonstratevaluetoourclients. Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassesareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedthefundservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessments,andtakingintoaccountallsevencriteria,webelievethefundisdeliveringvalue.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
At a glance
Balanced Solution Fund Objective:Toprovidecapitalgrowththroughinvestmentinotherfunds, toprovideexposuretoarangeofdifferentassetclasses.
Performance TheBalancedSolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning. This has beenduetoboththedecisionsabouthowtheinvestmentswerespreadacrossdifferentassetclasses,andtheperformanceoftheindividualfundsithasinvestedin.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentaken to address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleThe Balanced Solution fund has demonstrated economies of scale through a reduction in theOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentshowedthatthefundismarginallymoreexpensivethanitspeergroupaverage.Butafterreviewingcostsassociatedwiththefund,weconcludedthatoverallthefundisprovidingvaluetoclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassesareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedthefundservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
9
OverallconclusionFollowing our assessments,andtakingintoaccountallsevencriteria,webelievethefundisdeliveringvalue.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
CautiousSolutionFund Objective:Toprovideanincomewiththepotentialforsomecapital growththroughinvestmentinotherfunds,toprovide exposuretoarangeofdifferentassetclasses.
Performance TheCautiousSolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentaken to address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheassessmenthighlightedthattheCautiousSolutionfundisnotdeliveringeconomiesofscaleasefficientlyaswewouldhaveexpected.ThisfundisnowunderenhancedoversightandtheBoardhaveinstructedforadetailedactionplantobepresented.
ComparableMarketRatesOurassessmentshowedthatthefundismarginallymoreexpensivethanthepeergroupaverage.Butafterreviewingcostsassociatedwiththefund,weconcludedthatoverallthefundisprovidingvaluetoclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassesareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
Overallconclusion Following our assessmentstakingintoaccountallsevencriteria,we conclude that the funddemonstratesvalue,butenhancedoversightisinplacetoreviewtheeconomies of scale.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
10
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
DefensiveSolutionFund Objective:Toprovideanincomewiththepotentialforsomecapital growththroughinvestmentinotherfunds,toprovide exposuretoarangeofdifferentassetclasses.
Performance TheDefensiveSolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning. This has beenduetoboththedecisionsabouthowtheinvestmentswerespreadacrossdifferentassetclasses,andtheperformanceoftheindividualfundsithasinvestedin.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentaken to address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheassessmenthighlightedthattheDefensiveSolutionfundisnotdeliveringeconomiesofscaleasefficientlyaswewouldhaveexpected.ThisfundisnowunderenhancedoversightandtheBoardhaveinstructedforadetailedactionplantobepresented.
ComparableMarketRatesOurassessmentshowedthatthefundismarginallymoreexpensivethanthepeergroupaverage.Butafterreviewingcostsassociatedwiththefund,weconcludedthatoverallthefundisprovidingvaluetoclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassesareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the funddemonstratesvalue,butenhancedoversightisinplacetoreviewtheeconomies of scale.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
11
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
DiscoverySolutionFundObjective:Toprovideanincomewiththepotentialforsomecapital growththroughinvestmentinotherfunds,toprovide exposuretoarangeofdifferentassetclasses.
Performance TheDiscoverySolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning. This has beenduetoboththedecisionsabouthowtheinvestmentswerespreadacrossdifferentassetclasses,andtheperformanceoftheindividualfundsithasinvestedin.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentaken to address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheassessmenthighlightedthattheDiscoverySolutionfundisnotdeliveringeconomiesofscaleasefficientlyaswewouldhaveexpected.ThisfundisnowunderenhancedoversightandtheBoardhaveinstructedforadetailedactionplantobepresented.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the funddemonstratesvalue,butenhancedoversightisinplacetoreviewtheeconomies of scale.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
12
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
DynamicSolutionFundObjective:Toprovidecapitalgrowththroughinvestmentinotherfunds, toprovideexposuretoarangeofdifferentassetclasses.
Performance TheDynamicSolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning. This has beenduetoboththedecisionsabouthowtheinvestmentswerespreadacrossdifferentassetclasses,andtheperformanceoftheindividualfundsithasinvestedin.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentaken to address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheDynamicSolutionfundhasdemonstratedeconomiesofscalethroughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-year period.
ComparableMarketRatesOurassessmentshowedthatthefundismarginallymoreexpensivethanthepeergroupaverage.However,afterreviewingcostsassociatedwiththefund,weconcludedthatoverallthefundisprovidingvaluetoclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
13
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
Strategic Solution FundObjective:Toprovidecapitalgrowththroughinvestmentinotherfunds, toprovideexposuretoarangeofdifferentassetclasses.
Performance TheStrategicSolutionfund’sperformanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group. This is understandably concerning. This has beenduetoboththedecisionsabouthowtheinvestmentswerespreadacrossdifferentassetclasses,andtheperformanceoftheindividualfundsithasinvestedin.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentaken to address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleThe Strategic Solution fund has demonstrated economies of scale through a reduction in the OngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-year period.
ComparableMarketRatesOurassessmentshowedthatthefundismarginallymoreexpensivethanthepeergroupaverage.However,afterreviewingcostsassociatedwiththefund,weconcludedthatoverallthefundisprovidingvaluetoclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavereviewedtheshareclassesavailableandasaresultreducedtheAnnualManagementCharge(AMC)ontheAshareclass.TheAandGshareclassareverysimilarinpurposeso,wewillconsiderrationalisingtheminthefuturetoachievebetteroutcomesfor clients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
14
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
Global Real Estate Securities Objective:TheFund’saimistoprovideacombinationofincomeandcapitalgrowthbyinvestinginglobalpropertysecurities.
Performance TheMulti-ManagerGlobalRealEstateSecuritiesfundperformanceover1,3and5yearsisbehindtheaverageperformanceofotherfundsinitspeergroup.Thisisunderstandablyconcerning.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleThe Multi-Manager Global Real Estate Securities fund has demonstrated economies of scale throughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavelookedatchargesacrosstheshareclassesinthemulti-managerfundrangeandourassessmentsconcludedthattherearenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.However,wehavereducedtheAnnualManagementCharge(AMC)fortheretailshareclass(A)andwewillconsiderrationalising theshareclassesacrosstherangeinthefuturetoachievebetteroutcomesforclients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
Multi-Manager
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
16
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
InternationalEquityObjective:TheFund’saimistoprovidecapitalgrowthandsomeincome byinvestinginglobalshares.
Performance TheMulti-ManagerInternationalEquityfundperformanceover1,3and5yearsisbehindtheaverageperformanceofotherfundsinitspeergroup.Thisisunderstandablyconcerning.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakentoaddressperformanceconcerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheMulti-ManagerInternationalEquityfundhasdemonstratedeconomiesofscalethroughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavelookedatchargesacrosstheshareclassesinthemulti-managerfundrangeandourassessmentsconcludedtherearenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.However,wehavereducedtheAnnualManagementCharge(AMC)fortheretailshareclass(A)andwewillconsiderrationalisingtheshareclassesacrosstherangeinthefuturetoachievebetteroutcomesforclients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
ASSESSMENT OF VALUE REPORT
Multi-Manager
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
17
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
UKEquityFocusObjective:TheFund’saimistoprovidecapitalgrowthandsomeincome byinvestinginUKshares.
Performance TheMulti-ManagerUKEquityFocusfundperformanceover1,3and5yearsisbehindtheaverageperformanceofotherfundsinitspeergroup.Thisisunderstandablyconcerning.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheassessmenthighlightedthattheMulti-ManagerUKEquityFocusfundisnotdeliveringeconomiesofscaleasefficientlyaswewouldhaveexpected.ThisfundisnowunderenhancedoversightandtheBoardhaveinstructedforadetailedactionplantobepresented.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavelookedatchargesacrosstheshareclassesinthemulti-managerfundrangeandourassessmentsconcludedtherearenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.However,wehavereducedtheAnnualManagementCharge(AMC)fortheretailshareclass(A)andwewillconsiderrationalisingtheshareclassesacrosstherangeinthefuturetoachievebetteroutcomesforclients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the funddemonstratesvalue,butenhancedoversightisinplacetoreviewtheeconomies of scale.
Multi-Manager
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
18
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
UKEquityIncomeObjective:TheFundaimstoprovideanincometogetherwithsome capitalgrowthbyinvestinginUKshares.
Performance TheMulti-ManagerUKEquityIncomefundperformanceover1,3and5yearsisbehindtheaverageperformanceofotherfundsinitspeergroup.Thisisunderstandablyconcerning.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheMulti-ManagerUKEquityIncomefundhasdemonstratedeconomiesofscalethroughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavelookedatchargesacrosstheshareclassesinthemulti-managerfundrangeandourassessmentsconcludedthattherearenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.However,wehavereducedtheAnnualManagementCharge(AMC)fortheretailshareclass(A)andwewillconsiderrationalising theshareclassesacrosstherangeinthefuturetoachievebetteroutcomesforclients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
ASSESSMENT OF VALUE REPORT
Multi-Manager
£
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
19
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
UKEquityGrowthObjective:TheFund’saimistoprovidecapitalgrowthwithsomeincomebyinvestinginUKshares.
Performance TheMulti-ManagerUKEquityGrowthfundperformanceover1,3and5yearsisbehindtheaverageperformanceofotherfundsinitspeergroup.Thisisunderstandablyconcerning.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheMulti-ManagerUKEquityGrowthfundhasdemonstratedeconomiesofscalethroughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesWehavelookedatchargesacrosstheshareclassesinthemulti-managerfundrangeandourassessmentsconcludedthattherearenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.However,wehavereducedtheAnnualManagementCharge(AMC)fortheretailshareclass(A)andwewillconsiderrationalising theshareclassesacrosstherangeinthefuturetoachievebetteroutcomesforclients.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
Multi-Manager
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
20
At a glance
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
IPS Growth PortfolioObjective:TheaimoftheFundistoachievecapitalgrowthbyinvestingindirectlythroughcollectiveinvestmentschemesand/or directly in a wide range of asset classes.
Performance Thefundisnotusedasastandaloneproduct,itisusedinconjunctionwithIPSIncomeorIPSHigherIncomeinvariousproportions.Theperformancehasbeenfavourablerelativetotheaverageperformanceofitspeersover1,3,and5yearperiods.However,duetothenatureofthisfund,peer-relativeassessmentislessmeaningful.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleThe IPS Growth portfolio has demonstrated economies of scale through a reduction in the OngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-year period.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesThefundisdesignedforuseasacomponentwithintheSchrodersPersonalWealthPersonalDiscretionaryPortfolioService(PDPS)andisnotsuitableforinvestmentoutsideofthis.Therearethereforenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
ASSESSMENT OF VALUE REPORT
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
At a glanceAreasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
22
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
IPS Income PortfolioObjective:TheFundaimstoprovideincomewithsomepotentialforcapitalgrowthbyinvestingindirectlythroughcollectiveinvestmentschemesand/ordirectlyinawiderangeofassetclasses.
Performance Thefundisnotusedasastandaloneproduct,itisusedinconjunctionwithIPSGrowthinvariousproportions.Performanceover1,3and5yearsisbehindtheaverageperformanceofotherfundsinitspeergroup.However,duetothenatureofthisfund,peer-relativeassessment is less meaningful.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleThe IPS Income portfolio has demonstrated economies of scale through a reduction in the OngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-year period.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesThefundisdesignedforuseasacomponentwithintheSchrodersPersonalWealthPersonalDiscretionaryPortfolioService(PDPS)andisnotsuitableforinvestmentoutsideofthis.Therearethereforenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
At a glance
23
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
ASSESSMENT OF VALUE REPORT
IPSHigherIncomePortfolioObjective:TheFundaimstoprovideahighlevelofincomebyinvestingindirectlythroughcollectiveinvestmentschemesand/or directly in a wide range of asset classes.
Performance Thefundisnotusedasastandaloneproduct,itisusedinconjunctionwithIPSGrowthinvariousproportions.Performanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
AuthorisedFundManagerCostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleTheIPSHigherIncomeportfoliohasdemonstratedeconomiesofscalethroughareductionintheOngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-yearperiod.
ComparableMarketRatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
ComparableServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
ClassesofSharesThefundisdesignedforuseasacomponentwithintheSchrodersPersonalWealthPersonalDiscretionaryPortfolioService(PDPS)andisnotsuitableforinvestmentoutsideofthis.Therearethereforenoothershareclassesthatservebroadlythesamepurposeasthosethatarecurrentlyavailable.
QualityofServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
OverallconclusionFollowing our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
At a glance
£
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
24
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
ASSESSMENT OF VALUE REPORT
Asset Allocator FundObjective:TheFundprovidesatacticalinvestmentstrategy.TheFundaimstoachievethisbyseekingatotalreturn(incomeandgrowth)byinvestingdirectlyorindirectlyinawiderangeofassetclassesandgeographicregions(includingemergingmarkets).TheFund‘sexposurecanvarysignificantlyatthefundmanager’sdiscretion.
Performance TheAssetAllocatorfundisnotusedasastandaloneproduct,itisusedinconjunctionwithmodelportfolios.However,performanceover1,3and5yearsisbehindtheaverageperformance of other funds in its peer group.
ThefundperformanceisnotwheretheBoardwouldlikeittobeandactionhasbeentakento address performance concerns.
Authorised Fund Manager CostsWehavereviewedthefund’son-goingcostsandhaveconcludedthatthechargesassociatedwith running the fund are appropriate and fair.
Economies of ScaleThe Asset Allocator fund has demonstrated economies of scale through a reduction in the OngoingChargesFigure(OCF)inlinewithanincreaseinthevalueofitsassetsoverafive-year period.
Comparable Market RatesOurassessmentfoundthatthefund’sOngoingChargesFigure(OCF)ismarginallylowerthanthepeergroupaverage.Ourratesarethereforecomparablewiththemarketaverageanddemonstratevaluetoourclients.Wewillcontinuetomonitorcostsonanon-goingbasis.
Comparable ServicesThisfundisnotavailableinanyotherformtootherclients(suchasinstitutionalclients)andtherefore,thiscriteriadoesnotapply.
Classes of SharesAspartofourassessments,wehavereducedtheAnnualManagementCharge(AMC)for theretailshareclass(A)andwewillconsiderrationalisingtheshareclassesacrosstherangeinthefuturetoachievebetteroutcomesforclients.
Quality of ServiceWelookedattheoverallclientexperience.WereviewedtheservicesprovidedbytheDepositary,Custodian,Auditor,InvestmentAdviser,TransferAgentandFundAdministrator.Wereviewedkeyperformanceindicatorsthataffectclientsandanalysediftheywereinlinewithexpectations.Ourassessmentconcludedthattheseservicesprovidevaluetoourclients.
Overall conclusion Following our assessmentstakingintoaccountallsevencriteria,we conclude that the fund isdeliveringvalue.
At a glance
ASSESSMENT OF VALUE REPORT
£
Areasdeliveringvalue
AreaswhereimprovementwasrequiredandactionhasbeentakenAreas where enhanced oversightisinplace
26
Performance
Authorised Fund ManagerCosts
Economies of Scale
ComparableMarketRates
ComparableServices
ClassesofShares
QualityofService
GlossaryWearetransparentineverythingthatwedobutwerecognise thatsometimesthereareindustrytermsthatstillneedexplaining.Wehopethishelps.
ACD–(AuthorisedCorporateDirector)AnACDisacorporatebodygivenpowersanddutiesunderFCAregulationstooperateanICVC.TheACDisresponsiblefortheadministrationandaccountancyaswellasprovidingthelegalframeworkaroundthefunds,includingcompliance.OurACDisScottishWidowsSchroderPersonalWealth(ACD)Limited.
ACDBoardOurACDboardisresponsibleforallactivitiesrelatingtothefunds.
AnnualManagementCharge(AMC)Theannualfeetakenbythefundmanagerformakinginvestmentdecisions,usuallyapercentageoftheamountinvested.
AuthorisedFundManager(AFM)Theinvestmentmanagementcompanythatprovidesresearchandanalysisinpurchasingportfolio securities on behalf of the fund.
BenchmarkAstandard,(usuallyanindexoramarketaverage)thataninvestmentfund’sperformanceismeasuredagainst.Thebenchmarkmustbedisclosedinthefundprospectus.
ClassesofSharesAfundcanhavedifferentclassesofshares.Theseclasseswillvarybyhowtheyaredistributed and whether they are accumulation or income in nature. Share classes will typicallyhavedifferentannualmanagementchargesandongoingchargesfigures.
Economies of ScaleAneconomicprinciplestatingthatasvolumeofproductionincreases,thecostofproducingeachincrementalunitdecreases.Asappliedtothefundbusiness,theimplicationisthatasassetsincrease,thepercentagecostofmanagingand/orservicingthose assets decreases.
FinancialConductAuthority(FCA)TheFCAregulatesauthorisedinvestmentfunds.TheFCAistheUKregulatorofFinancialServicesandrequiresfirmstoadheretostrictrules,principlesandguidance.
ICVC(InvestmentCompanywithVariableCapital)Atypeofinvestmentfund,structuredasacompany,thatcancreatesharesfornewinvestorsandwhichwillbuysharesbackfromaninvestoriftheywishtosell.
OngoingChargesFigure(OCF)TheOCFismadeupoftheAnnualManagementCharge(AMC)andotheroperatingcosts.Otheroperatingcostsincludethecostsforotherservicespaidforbythefund,suchasthefeespaidtothetrustee(ordepositary),custodian,auditorandregulator.
28
ASSESSMENT OF VALUE REPORT
If you have any questions on the assessment please contact your adviser.
Schroders Personal Wealth is a trading name of Scottish Widows Schroder Personal Wealth (ACD) Limited. Registered in England and Wales No. 11722973. Authorised and regulated by the Financial Conduct Authority number 834833. Registered Office: 25 Gresham Street, London EC2V 7HN.
SPW00172 (09 /20)