Fund Label ®

Fund Label

Have you ever looked at the packaging on your investment, and thought what on earth is actually in it?

It’s hard enough looking at the packaging on our food, let alone the packaging on our investments.

With food at least we can understand the terms salt, fat and sugar, but with investments it all becomes a little less clear.

Just as too much salt can cause us high blood pressure, too much of one fund or one asset class, can also cause its own version of high blood pressure!

Our Fund Label ® is based upon just three things

1. How much does a fund cost?

2. Does it represent good value compared to its peers?

3. How much value did it lose in the 2008/09 crisis?

This last point is known as ‘stress testing’. Whilst most fund managers want you to look at their wonderful performance over ‘such and such’ period, they don’t like to show you the carnage that occurred when it was stressed.

But this is the most important information. In fact depending on how long a track record a fund has, it should be stress tested over multiple stock market dips.

Why go to all this trouble? Because then it’s possible to take a view on its risk and whether it’s ‘right fit’ for you and your objectives.

The Fund Label ® is therefore more than just preventing you from getting indigestion, its essential for managing and understanding risk.