ESBGMV Index targets the minimum variance multi-asset portfolio for GBP-based investors. Systematic asset class adjustments offer insight to traditional and ETF-based investors. Compared to 4q17, the index's biggest switches as at 1q18 have been from European High Yield Bonds and UK Equity to European Aggregate Bonds and Gold. Risk-based indices are different to factor-based indices, as they focus on the interaction between securities, not the characteristics within securities. Put simply, it's an alternative, systematic approach to asset allocation and risk management. The Elston Multi-Asset Min Volatility Index (ESBGMV) launched in 2014 represents the minimum variance multi-asset portfolio for GBP investors. As it takes a systematic approach, it's always interesting to see the asset-class switches that this methodology triggers via its monthly readjustments. Comparing the index composition from 4q17 to 1q18, the biggest switches have been cutting back Europe
UK regulator forced a number of asset management firms to pay £34m compensation to customers for “closet indexing” Closet indexing means funds are presented as higher cost active, but actually just hug their benchmarks We estimate there is €0.4 to €1tr of assets in “closet index” funds in Europe, depending on what criteria are applied. Either way, fund houses have been warned “Mutton dressed as lamb” is a derogatory old saying of something or someone that’s dressed up to look better than it is. In olden days, some dodgy butchers would dress mutton up to look like lamb to get a higher price. I’ve got nothing against mutton. It offers good value for money and does a nutritious job. But I don’t want to be given one thing when sold another. Some “active” funds that actually hug an index is another form of misrepresentation. And this month, the UK regulator got tough forcing a number of fund houses to pay £34m compensation to customers overcharged in closet inde