Private investor indices

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An introduction to the FTSE/APCIMS indices

The Private Investor Indices provided by FTSE and APCIMS are a set of calculations which indicate the returns which investors might expect from their portfolios. The skill in investment management is to design a unique portfolio which will meet an individual investor's needs, so it is unlikely that your portfolio growth will reflect the movement of the Indices exactly.

These are not industry-wide benchmarks, nor do they provide any kind of alternative to the professional investment advice of portfolio managers. However, used properly, they can give a useful perspective on the world of stocks and shares and on the performance of your portfolio.

They can provide:

A measure to compare the performance of Income, Growth and Balanced funds.
A basis for reviewing the asset allocation and structure of your portfolio with your fund manager or stockbroker.
A benchmark for assessing and comparing the performance of discretionary fund managers.

There are five Private Investor Indices, to reflect the differing aims of investors:

the Conservative index
the Growth portfolio
the Income portfolio and
the Balanced portfolio
the Global Growth index

Each of these portfolios contains different proportions of UK shares, international shares, bonds and cash to reflect the investment aims. The changes in their values (the movement up or down of the UK shares, international shares, bonds and cash) are represented by the movements of four related indices.

Currently the allocations and their respective indices are:

	% Stock Market Conservative index	% Income portfolio	% Growth portfolio	% Balanced portfolio	% Representative index
UK shares	21.5	40.0	47.5	42.5	FTSE All-Share
International shares	11.0	15.0	32.5	25.0	FTSE World Ex-UK Index calculated in Sterling
Bonds	52.5	35.0	7.5	20.0	FTSE Gilts All Stocks index
Cash	5.0	5.0	2.5	5.0	7-Day LIBOR –1% (London Interbank Offer Rate)
Commercial Property	2.5	2.5	2.5	2.5	FTSE UK Commercial Property Index
Hedge funds	7.5	2.5	7.5	5.0	FTSE/APCIMS Hedge (Inv trust) index
Total	100	100	100	100