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Spectrum funds approach GBP1bn in three years

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The Skandia Spectrum funds now have GBP976 million funds under management and all sit within or below their volatility ranges despite the near collapse of the financial system and unprecedented market volatility since their launch three years ago.

 

Analysis by Skandia shows that over the past three years the S&P500 index has been more volatile than at any point since 1942 yet the Spectrum funds have still delivered exactly what Skandia intended, with risk adjusted returns that are favourable compared to the active, balanced and cautious sectors.
 
The Spectrum funds are a range of six volatility-controlled funds that are managed by Skandia Investment Group to not exceed defined volatility targets over the long term, and deliver investment returns commensurate with their level of volatility.  They are aimed at investors who want to ensure that their investments are being managed in line with the level of risk they choose to accept within their portfolio.  
 
Despite the massive market turmoil since their launch, high quality fund management and volatility control by SIG has ensured that all six funds have performed within or marginally below their volatility ranges and have risk adjusted returns, as measured by their Sharpe ratios*, that compare favourable to managed funds sectors.
 
The Spectrum funds were originally designed to fit with the risk profiling tools on the Skandia Investment Solutions platform, but following significant demand from financial advisers are now available on all the leading industry platforms.  The range continues to grow in popularity, with daily in-flows continuing to increase as more advisers seek to outsource elements of their investment process as they evolve their business models in the run up to implementation of the Retail Distribution Review.
 
Graham Bentley (pictured), head of UK proposition at Skandia, says: “The Spectrum funds have struck a chord with financial advisers as they were designed with one person in mind, the customer.  As we all prepare for implementation of the RDR many advisers are deciding to offer their customers a range of investment options.  Risk-rated funds that are directly aligned to defined and measurable risk levels have proved to be a popular option because they enable the adviser to focus solely on the financial planning needs of their customer and outsource asset allocation decisions and fund manager selection to a massive team of investment experts at SIG.  John Ventre and his team have done an amazing job in ensuring the funds have performed in line with the volatility targets during such a volatile time for world markets.”
 
John Ventre, lead fund manager on the Spectrum funds, says: “I am very pleased with the returns we have been able to deliver for investors since the funds were launched three years ago. Financial markets have not been straightforward over this period, which included a near collapse of the financial system and for the funds to have successfully met their volatility objectives since launch against this backdrop is strong evidence of the efficacy of the approach which the funds take. The funds remain well positioned to meet these important risk objectives as we move forward, and are also well positioned to deliver good returns for investors within that context.”

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