Dynamic Planner has expanded its fund risk profiling service to include investment trusts. Broadening the range of investment vehicles analysed by Dynamic Planner, the first trust to be risk profiled is the Seneca Global Income & Growth Trust plc, assigned a Dynamic Planner Risk Profile 7 (on a 1-10 scale).
To date, Dynamic Planner risk profiles more than 1400 model portfolios and open-ended funds and plans to increase the number of investment trusts analysed. Financial advisers will then be able to apply the same approach to assessing the suitability of different solutions – whether an OEIC or investment trust.
Dynamic Planner Proposition Director Chris Jones said: “Trusts are the vehicle of choice for many investors and while choice is all important, we believe it’s vital to maintain a consistency of approach when assessing suitable investment solutions.
“For more than 17 years, we have helped thousands of advisers understand the risk profile of thousands of model portfolios and open-ended funds. We can apply this same model to assess the risk profile of investment trusts, because we analyse all risk characteristics of underlying holdings.”
Chris continued: “We are delighted to welcome the Seneca Global Income & Growth Trust plc to Dynamic Planner. We have conducted in-depth analysis of the underlying holdings of the Trust, looking back over several months. By utilising our in-house research, which now spans over 25,000 individual securities, we calibrated the Trust’s holdings to our latest capital market assumptions, enabling us to assess its expected volatility journey.
“This process includes the evaluation of gearing on individual holdings and this was also carefully considered at the wrapper level for the Seneca Global Income & Growth Trust plc.”
David Thomas is Chief Executive of Seneca Investment Managers Ltd and the Trust’s investment manager.
He said: “We were keen to have this analysis undertaken, since Dynamic Planner has provided formal risk profiling oversight of our similar open-ended multi-asset funds for a number of years. We are very comfortable with their rigorous process and saw no reason to exclude the Trust, just because it was closed-ended, given its inherent multi-asset diversification and the tight Board control over the level of gearing applied to the underlying assets.”
Nick Britton – Head of Intermediary Communications at the AIC [The Association of Investment Companies] – said: “As part of our ongoing education programme, we’ve trained thousands of financial advisers about investment trusts and we’re keen to break down barriers to their wider use wherever possible.
“One of these barriers has been the lack of availability of risk profiling for investment trusts, which many advisers have told us is essential to their research process. This news from Dynamic Planner is an encouraging sign that one more barrier to investment trust use is on the way to being removed, smoothing the path to wider adoption of trusts among advisers.”
Find out more about Dynamic Planner fund research