From 2 April, APCIMS Private Investor Indices (PII) will cease to track the FTSE World ex-UK Index for their global equities component, instead using FTSE All World ex-UK Index which gives greater coverage of emerging markets.
Significantly, the trade association is also considering polling its members on the appropriateness of its current representative index for bonds, the FTSE Gilts All Stocks Index, as investors increasingly disfavour the asset class.
New benchmarks
The change comes less than a year after APCIMS introduced two new PIIs, Global Growth and Conservative, to sit alongside its existing Growth, Income and Balanced benchmarks. As part of an ongoing revaluation of its offering, it will also examine its coverage of alternatives given that the PIIs currently exclude structured products, private equity, commodities and other alternative absolute return vehicles.
“In the last year we have gone from three portfolios to five and, dependent on the results of future polling and investigations, there may be more to come,” said Jason Baxter, APCIMS’ head of investment & member services.
“It is important that what we have is both relevant now and flexible enough to maintain its relevance in the future. I would hate to find that five years from now people tell me they no longer use the APCIMS indices as they ceased being relevant for one reason or another. It is our responsibility to see that this does not happen.”
Gilts rise
Whilst many discretionaries would invest into gilts directly, it is worth noting that net retail sales for dedicated gilt funds totalled just £41m in January, according to the IMA. This compares to a combined sales figure for corporate bond, strategic bond, global bond and high yield funds of £592m. Funds under management for gilts totalled £16.2bn, compared to close to £100bn for the other fixed interest asset classes.
Interestingly, gilts was one of the better performing sectors last year despite the bulk of professional investors shying away from the asset class. This in turn meant many private client portfolios underperformed the APCIMS benchmarks in 2011.
The role of the APCIMS indices and benchmarking in general will be discussed in more detail in the forthcoming April edition of Portfolio Adviser.
