For financial advisers facing the increasing burden of regulatory changes, a fund of funds investment solution can sometimes be the best option for managing clients' investment portfolios. Launched in September 2010, the Standard Life Investments MyFolio range has been a popular solution for advisers looking to outsource for a number of reasons.
With 25 different funds, the risk-rated MyFolio contains five different risk levels (from one (lowest risk) to five (highest risk)) and five different investment ranges.
Clearly, with a variety of client objectives, many advisers are looking for a solution that also offers them choice and flexibility. With 25 different funds, the risk-rated MyFolio contains five different risk levels (from one (lowest risk) to five (highest risk)) and five different investment ranges. The Market range invests mainly in passive funds, and is the lowest cost option, and the Managed and Managed Income ranges invest predominantly in Standard Life Investments funds.
Meanwhile, the Multi-Manager and Multi-Manager Income ranges both invest in funds from best-in-class fund managers across the whole market.
In addition, the MyFolio range can invest in up to 21 different asset classes, with the aim of allowing investors access to a truly diversified, actively managed portfolio.
We manage each of the 25 funds using a robust and repeatable four-step process. The first step is working in consultation with Moody's Analytics, world-leading experts in risk-modelling, to help determine the most efficient strategic mix of assets for each fund. Step two is fine-tuning this long-term Strategic Asset Allocation to take advantage of shorter-term investment opportunities we have identified (Tactical Asset Allocation). Next, we select the optimal blend of individual funds that go into each MyFolio fund, using quantitative and qualitative analysis. The final step is to regularly review and rebalance the portfolios, to check that each fund is always on track to deliver as expected.
We manage each of the 25 funds using a robust and repeatable four-step process. The first step is working in consultation with Moody's Analytics, world-leading experts in risk-modelling, to help determine the most efficient strategic mix of assets for each fund.
Then there is the vast resource behind MyFolio. Our investment process draws upon the expertise of more than 60 investment professionals, including economists, fund analysts, asset class experts and one of the largest dedicated fund research teams in the UK, led by fund manager Bambos Hambi. Expertise from Moody's Analytics in risk-modelling complements this, adding to the experience and expert knowledge backing up MyFolio. This comprehensive investment process allows advisers to outsource investment management to a team of dedicated experts whose day-to-day job is looking after clients' investments which is a key benefit of MyFolio.
For financial advisers, it is also critical that clients are provided with a solution matching their willingness and ability to take risk. Therefore, we designed MyFolio to help advisers achieve the right balance between risk and reward for clients. Moreover, key to MyFolio's success over the past seven years has been that each of the funds has delivered risk-adjusted returns in line with expectations. Investors in higher risk levels have experienced more volatility but have been compensated through higher long-term returns than the lower risk levels.
We also believe full transparency on MyFolio aids advisers and investors in understanding the funds. As a result, there is a range of resources, including client-friendly literature, regular webcasts and written updates on the funds available for advisers. A MyFolio reporting tool also means advisers can create branded client reports with market and fund commentary – yet another reason MyFolio has proven so popular.
The aim was to provide a solution that supported advisers and delivered excellent risk-adjusted returns for clients. Over the last seven years, the MyFolio funds have behaved, without exception, in line with investors' chosen level of risk.
Ultimately, we launched MyFolio in 2010 in response to demand from advisers for cost-effective, risk-targeted solutions. The aim was to provide a solution that supported advisers and delivered excellent risk-adjusted returns for clients. Over the last seven years, the MyFolio funds have behaved, without exception, in line with investors' chosen level of risk.
In order to ensure we continue to act in the best interest of investors, we regularly review the MyFolio funds. At the latest review, we made an adjustment to the pricing structure, reducing the annual management charge for multiple share classes across the MyFolio OEIC range. Reducing the charges further enhances MyFolio's position as a market-leading risk-based, fund-of-funds proposition. Now trusted with over £13 billion in assets under management (as at December 2017), the team behind MyFolio seek to continue delivering the long-term performance and support that advisers and their clients look for in an ideal, risk-rated investment solution.
Aberdeen Standard Investments is a brand of the investment businesses of Aberdeen Asset Management and Standard Life Investments.
The value of an investment is not guaranteed and can go down as well as up. Your client may get back less than they invested. Past performance is not a guide to the future. Standard Life Investments is authorised and regulated by the FCA.