UK - Many institutional fund managers are considering withdrawing from CAPS because retail funds are skewing its figures, a fund manager claims.
Fund managers say the latest CAPS Pooled Pension Fund Update includes at least two retail funds in its UK equity standard fund tables. These are the ABN AMRO UK Growth Fund and Fidelity Life Special Sits.
A leading fund manager said: “There has been a gradual expanse in the number of funds to a point where it is getting ridiculous. It is now a mishmash with quite a few retail funds.
“The CAPS universe has been massively undermined and a lot of houses are looking to withdraw from CAPS because of this.”
He added that as retail funds were often overweight in cash, the index was being skewed and could no longer be relied on as a peer group table of institutional funds.
CAPS research and development director Alan Wilcock admitted that some of the funds listed were open to retail investors. But he stressed they were also open to institutional investors, adding that there was bound to be overlap in some funds.
On the question of listing funds with small values, he argued that showing the funds from conception improved the transparency of the universe.
But Scottish Widows Investment Partnership head of global institutional investment Chris Walker said: “We believe it is important for investors to concentrate on the largest funds – we tend to look at the largest 10 for comparison.”
Threadneedle Investments institutional sales director Stephen Holt added: “It is important for the continued credibility of the pooled funds service that CAPS ensures only true institutional funds managed in a manner consistent with the appropriate index or peer group benchmark are included.”
Meanwhile, the NAPF said the lack of clarity in the CAPS tables meant funds had to spend extra money on advice.
Investment manager Tony Pryce said: “We are keen to encourage as much transparency as possible, if extraneous data clouds data from a pension fund’s point of view it is extra work for their advisers.”
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