Unwrapping risk targeted and return focused funds

Initially, Diamond Ratings will assess the following types of managed funds:

• Multi-manager funds across four IMA sectors – Mixed Investment 0-35% Shares, Mixed Investment 20-60% Shares, Mixed Investment 40-85% Shares, and Flexible Investment

• Directly invested managed funds across those sectors

• Risk-targeted fund families

• Unitised DFM funds

There are few right or wrong answers, and different clients and advisers will have different needs and beliefs. However, as a starting point, it is important for advisers to assess the needs of their business and, ultimately, the needs of their clients so that they know exactly what kind of fund will be able to meet both sets of requirements.

David Cartwright is head of Insight at Defaqto