Fortnightly News Blog – 2 June 2021

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Multi-asset muddle

Should your multi-asset fund be the focus of your next value assessment meeting? New research from Asset Intelligence suggests it should. According to the report – covered by Investment Week, among others – £22bn worth of assets are “languishing” in underperforming multi-asset funds.

AoV update

In AoV-land, Columbia Threadneedle is continuing a fee review it started last year to improve how it passes on scale benefits to customers. The fund board remains less than satisfied with the level of registrar fees charged in particular. Ignites Europe (subscription required) has the story, but FBC recommends all readers take a look at Columbia Threadneedle’s second AoV report for more information about its approach, as well as a novel way of displaying the report. It significantly moves the needle on AoV report digitisation, which is expected to be a big focus for many of the reports issued in Year 2.

iNED and friend of FBC, JB Beckett has been speaking to Ignites Europe about the visibility of the FCA throughout the evolution of AoV so far. Subscribers can watch the video or read the transcript here.

“You can see that [the FCA is] having good conversations with fund boards. Is it happening in a broad enough way, at this point? I suspect the answer is not.” – JB Beckett, speaking to Ignites Europe

ESG’s data dilemma

Incorporating ESG and sustainability themes is a big focus for regulators and asset managers, but the lack of data remains as a crucial barrier to success. A poll from Willis Towers Watson highlighted data as the biggest obstacle for sustainability across financial services, reports Funds Europe, while Investment Week’s Pedro Gonçalves explores the varying methodologies for environmental data in this article.

The European Fund and Asset Management Association has called for a delay to the rollout of new sustainable disclosure rules for investment funds, reports Investment Week. Perhaps this is not what investors want, however: as This Is Money reports, customers polled by Quilter Investors cited greenwashing as their primary ESG concern – exactly what the EU’s new SFDR rulebook is designed to eradicate.

Prudential rulebooks

Speaking of rules, the Central Bank if Ireland is flexing its consultation muscles. The regulator wants a “macroprudential framework” for investment funds domiciled in Dublin, Derville Rowland, director general for financial conduct, said in a recent speech. The plan echoes that of the FCA in the UK, which has been consulting on its own prudential regime for investment funds – the consultation for this closed on 28 May.

While the FCA may not have been publicly vocal on AoV, other relevant papers and reports are emerging. CP21/13 is a consultation on a new set of standards of care towards consumers, including a requirement to “assess the effectiveness of their actions”.

Aviva throws in the towel

Aviva Investors has admitted defeat in its battle to reopen its beleaguered open-ended property fund, as per Portfolio Adviser. Real estate funds were battered by the Covid-19 pandemic and, with some having only just recovered from the effects of Brexit on the property market, this was a step too far. Several remain gated, presenting a headache for managers and fund boards – although M&G reopened its offering in April.

Finally, this column from Robin Powell, the outspoken author of The Evidence-Based Investor, is worth a read. He touches on most aspects of investment funds in a short space of time, but his point is clear – investment managers must demonstrate clear value for money.

FBC takes no responsibility for the accuracy or quality of the news in the links provided above, and nor are the views and comments representative of FBC or its members, unless expressly stated. In some instances, as indicated, a subscription is required to access certain news articles, and content stored on the FBC portal is freely accessible for FBC members.