Our services and charges

Who are Cofunds? (click for answer)

     Cofunds is an initiative of the financial services industry to create more choice for investors. It was initially set up by four major companies, all familiar to you. These are M&G, Gartmore, Threadneedle, and Jupiter - these companies have now been joined by IFDS and Legal & General. Cofunds provides massive choice to the investing public, under one umbrella, and at no extra cost to you. Clients now have access to over 1000 funds from more than 60 fund managers, whether they are investing into funds directly or within an ISA or within a pension fund. Clients can transfer existing ISA, PEP and other funds to Cofunds platform, consolidating administration of all investments in one place. Imagine these improvements: - eliminating volumes of paper from different investment houses throughout the year - switching between funds quickly and easily - consolidated valuations on demand

In what ways can you help me? (click for answer)

     You can take advantage of our services in three different ways: 1) buy online funds of your choice, in which case, we give you no personalised advice 2) we can review your existing funds, identifying funds which are duds, and others where, frankly, you can do a lot better. 3) we can provide tailored advice, on proposed fund purchases or in structuring your portfolio as a whole See "Our service" in the top menu for more details.

How do I pay for your services? (click for answer)

     The costs represent excellent value, particularly taking account of the benefits. The precise cost varies dependent on how much you want us to do, as you might expect. Here are three examples. 1. You can benefit from our research and make your own fund choices. If you then buy funds online the initial charges are frequently 0%, and seldom above 0.5%. This is because we forego initial commission, and, on your behalf, negotiate charges to the lowest possible level. 2. We can review your existing funds, and there is no extra charge for this providing that your total funds exceed £20,000 in value. 3. We can provide you with bespoke advice, not just reviewing your funds, but also their suitability and the overall portfolio structure. There might be an additional charge for this service, depending on your precise requirements, the amount invested or to be invested, and the complexity of your affairs.

How can I regularly access your research at no cost? (click for answer)

     Even if you are not yet a client, our intention is to make as much of our research as possible freely available via the internet. If you require hard copies of our research there will be a cost (after you have had the first complimentary copy) until you become a client, when hard cpies of the research are available at no cost. Whichever route you prefer, the funds bought through us, or registered with us, come within our comprehensive Review and Monitoring Service, which applies whether your funds are within a general portfolio, ISAs/PEPs, or SIPPs.

How do I hear about new research? (click for answer)

     When you enter one of our sites for the first time we ask you for your email address. This ensures that we can let you know when new research is available, or when there are fundamental changes to existing research and recommendations. This will apply even if you are not yet a client.

Do you have a market commentary? (click for answer)

     Every month we email a market commentary to clients to help them make sense of what is going on, which isn't always clear from press headlines and comment. It will also highlight any particular opportunities that our research is uncovering. This is only available to clients.

Fund Analysis

What is Chartwise? (click for answer)

     Chartwise is statistically based fund performance measurement software developed by Asset Risk Consultants (“ARC”). Chartwise goes beyond standard performance tables based purely on return by adding four extra ingredients into the calculation of an ARC medal, namely: a benchmark; time weighting; risk; and correlation. Underlying the ARC methodology used by ChartWise is a model of the fund management process. The model assumes that the monthly investment returns delivered by a fund comprise three components. The first component is the return which a fund manager could have obtained with certainty by placing the funds on deposit. This is called the risk-free return. In order to make a return in excess of the risk-free rate the fund manager must invest in riskier assets, that is assets whose returns are uncertain. The difference between the returns realised by the fund and the risk-free returns, called the excess returns, can then, according to the model, be separated into two parts. The first part is a constant contribution (positive, one hopes) coming partly from the excess returns normally available in the market, and partly from the application of the fund manager’s skill. The second part is a random, unpredictable element, which adds volatility to the fund’s returns. The model assumes the fund manager has control over the level of volatility risk to which the fund is exposed but that the effect in any one month is unpredictable. In the long run these unpredictable positive and negative elements will on average tend to cancel out. Given this model, statistical methods can be applied to estimate the components of historical performance. This enables a comparison of a fund with its benchmark and peers. About ratings: In this guide we occasionally show ratings for individual funds. The ratings are platinum (the highest), then gold, silver, bronze, or no rating at all. These ratings are a short-hand for the quality of the fund as analysed by the Chartwise system. For example, a platinum rated fund shows evidence of consistency at a very high level.

How do I get my existing funds reviewed? (click for answer)

     Let us have details of all your existing holdings (see "About you" in top menu) and the first thing we will do is send you a full report on them, analysing each fund, including initial ideas for adjustment and transfers if necessary. Even if you think that your existing funds are good, how will you know when they begin to slip? So the second thing that we do is monitor your existing funds going forward. This means that if we begin to identify cause for concern with one of your holdings, we will send you an alert.

How much does it cost to have my funds reviewed? (click for answer)

     Typically there is no cost to you at all, so unless you already have an adviser undertaking this analysis for you, it really is an easy decision for you to use this service. To proceed go to "About you" in the top menu.

Why is there no cost to me? (click for answer)

     This is because your existing fund managers probably already pay 0.5% per annum (called renewal commission) to whoever you nominate as your current adviser, on the assumption that they provide some level of service - sadly, many do not do so, which is where we come in. By the way, if there is no adviser, the fund managers simply keep the money, and you get no credit for this. You must have at least £20,000 of funds paying renewal commission to benefit from this service.

How do you analyse funds? (click for answer)

     At the heart of this analysis is the Chartwise system, which provides an in-depth and objective statistical assessment of every fund, balancing growth, risk, and consistency. League tables that are usually based purely on past growth are extremely limited in their value, and can be dangerous. There is much more on this in appendix 1.

How can you help me build a portfolio? (click for answer)

     There are a number of approaches to building a portfolio, and the underlying asset and geographical split. Over many years, we have seen a variety of reviews that, with the benefit of hindsight of the recent past, tell us you should have "more invested overseas", then "most invested in the UK", or "greater sums in the US". Computer models are increasingly used to create the chimera of a rational portfolio structure, but tell you nothing of the "accidents of history", and lack the input that only experienced practitioners can provide. To create a model portfolio for discussion with you we will initially apply a rule of thumb that the low risk element of your portfolio should be equal to your age, which is derived from the timeless premise that the older you are, the lower the level of risk that is appropriate. So if you're aged 25 the low risk holdings would be 25%, and if you're aged 75 they might be 75% of your total investments. This is only a rule of thumb, giving a structure for consideration and discussion. See more in the left hand menu, "model portfolio".

Portfolio and risk

What is monthly risk? (click for answer)

     To be a bit more specific on risk levels attached to particular funds, throughout this guide we refer to risk or “monthly risk”, and a bit more explanation is needed. The incentive for taking risk is that, in the long term, risk investments should provide you with higher returns than leaving the money on deposit. In the section above, we highlighted that the return from a typical UK stockmarket fund over the last 10 years was 160%, compared to the deposit return of 69%. What risk did you take month to month to achieve this vastly superior return? Put another way, in most months what is the maximum typical fall in capital value that might be experienced? The “monthly risk” figure for a typical UK stockmarket fund is about 4.5%. This roughly means that in 19 months out of 20 you should not, on average, expect a fall in the capital value of more than 4.5% in any one month. In one month of out 20 you should expect the loss to be more severe (October 1987 being an extreme example, with a 20%+ fall in one month). Therefore if you wish to invest in a typical UK stockmarket fund, we can say that you should be prepared for a loss of at least this magnitude from time to time, that is 4.5% in one month.

How can you help me build a portfolio? (click for answer)

     There are a number of approaches to building a portfolio, and the underlying asset and geographical split. Over many years, we have seen a variety of reviews that, with the benefit of hindsight of the recent past, tell us you should have "more invested overseas", then "most invested in the UK", or "greater sums in the US". Computer models are increasingly used to create the chimera of a rational portfolio structure, but tell you nothing of the "accidents of history", and lack the input that only experienced practitioners can provide. To create a model portfolio for discussion with you we will initially apply a rule of thumb that the low risk element of your portfolio should be equal to your age, which is derived from the timeless premise that the older you are, the lower the level of risk that is appropriate. So if you're aged 25 the low risk holdings would be 25%, and if you're aged 75 they might be 75% of your total investments. This is only a rule of thumb, giving a structure for consideration and discussion. See more in the left hand menu, "model portfolio".

What level of risk is right for me? (click for answer)

     A key adjustment to the model portfolio will arise from taking into account your attitude to risk. Establishing your attitude to risk is, in our view, art not science. See much more detail in left hand menu, "what degree of risk are you comfortable with?".