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AFI Methodology
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Objectives
The Adviser Fund index, or set of indices, are designed to act as indicators of the UK funds market.
The AFI provides a benchmark against which the investment community can compare fund portfolio performance,
as well as offering a relevant flagship index for the funds market.
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The Indices
There are three themed indices that currently form the AFI.
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The Constituents
There are three portfolios of funds, one for each index.
We have formed the AFI Panel, a representative group of the UK's leading financial advice firms. Each firm selects a portfolio of funds for each themed index, according to the skills and expertise of their organisation.
The portfolios that the Panellists submit must have a maximum of 10 holdings, which are weighted by the Panellist.
FE fundinfo aggregates each Panelist's portfolios to obtain an overall list of constituents and weightings.
Allowing for similar selections by different Panellists, each index would have between 50-100 constituents.
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Criteria for the Selection of Fund Portfolios
For the AFI Aggressive, Balanced and Cautious indices, funds must be derived from the 'UK Authorised Unit Trusts and OEICs' universe.
The Panellists must assume that the 'client' is saving for a pension at 65. For example:
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- AFI Cautious portfolio - Panellists would choose funds suitable for a person in their late 50s
- AFI Balanced portfolio - Panellists would choose funds suitable for a person in their mid 40s
- AFI Aggressive portfolio - Panellists would choose funds suitable for a person in their late 20s
Panellists are also required to weight their fund selections accordingly.
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Mechanics
The AFI set of indices is calculated daily.
Composition of the portfolios are reviewed and rebalanced semi-annually.
All values are calculated on a total net return, bid / bid, mid / mid basis.
Each index starts at 100.
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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.
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