2nd September 2008
Change to APCIMS indices show increasing use of hedge funds in private client portfolios
The Association of Private Client Investment Managers and Stockbrokers is increasing the weighting of hedge funds in their asset allocation indices. FTSE APCIMS Private Investor Indices is one of the main benchmarking tools used in the private client industry. The indices which provide a benchmark of asset allocation on model portfolios show that hedge funds have become more important for growth and balanced portfolios.
In response to evidence derived from surveys sent to a cross section of APCIMS membership the APICMS indices committee will increase the hedge fund component in both the Growth and Balanced portfolios from 5% to 7.5%. UK equities will decrease in both cases from 50% to 47.5% in the Growth Index and from 45% to 42.5 % in the Balanced Index. There is no change in the Income Index.
Mike Lenhoff, Chairman of the APCIMS Indices committee said:“We have observed an increase in weightings to hedge funds within firms’ model portfolios over the last three quarters. I would attribute this to a strategic move toward more defensive assets as portfolio managers seek to stabilise portfolio returns against the backdrop of increased volatility in equity markets”
The committee, which meets quarterly, analyses the asset allocation survey (sent quarterly to a cross section of APCIMS’ membership) and makes changes based on this and committee members’ own industry knowledge. The committee is representative of the private investment market and is comprised of industry practitioners and investment managers. In order to remain relevant to its users the indices need to be regularly and expertly reassessed.
Please find below the breakdown of the asset allocation as it stands at the moment and how it would look incorporating the proposed changes.
Allocation from 22nd September 2008
Income Portfolio |
% Growth Portfolio |
% Balanced portfolio |
% Representative index |
|
| UK shares | 45 |
47.5 |
42.5 |
FTSE All-Share |
| International shares | 10.0 |
30 |
22.5 |
FTSE World Ex-UK Index calculated in Sterling |
| Bonds | 35 |
5 |
17.5 |
FTSE Gilts All Stocks index |
| Cash | 5 |
5 |
5 |
7-Day LIBOR - 1% (London Interbank Offer Rate) |
| Commercial Property | 5 |
5 |
5 |
FTSE UK Commercial Property Index |
| Hedge Funds | - |
7.5 |
7.5 |
FTSE Hedge |
| Total | 100 |
100 |
100 |
For further information please call:
Dirk Paterson, Head of Communications
APCIMS Office: 020 7247 7080
Mobile: 07507 855 428
Email: dirkp@apcims.co.uk
Notes to editors:
APCIMS
- More than 12 million people in the UK currently invest directly in stocks and shares and other financial instruments to secure their financial futures
- APCIMS represents over 140 firms all over the UK who deal primarily in stocks and shares on behalf of individuals and the institutions in which we have our money
- Around £400 billion of the country’s wealth is under the management of our members
- Our members employ over 200,000 people across the UK
- Our aim is to ensure that the regulatory, tax and other changes across Europe minimize impact on the investment community
- We want to lead the debate on regulation in Europe, with UK regulators and with British parliamentarians to make sure consumers are protected while at the same time our industry flourishes in the UK
FTSE APCIMS Private Investor Index series
- The FTSE APCIMS Private Investor Index Series is designed to compare the performance of income, growth and balanced funds; as a basis for reviewing the asset allocation and structure of a portfolio; and as a benchmark for assessing and comparing the performance of discretionary fund managers
- The index series incorporates returns from the FTSE All-Share Index, FTSE World ex UK Index, FTSE Gilts All-Stocks Index, FTSE All UK Property Index, FTSE Hedge Index and Cash on deposit
- Capital and total return versions are available for the index series
- The indices are managed according to a transparent and public set of index rules, and overseen by an independent committee of leading market professionals. The committee ensures that the rules are correctly applied and adhered to. Regular index reviews are conducted to ensure that a continuous and accurate representation of the market is maintained.