AJ Bell launches passives-only managed portfolio service for financial advisers

Aug 17th, 2016 | By | Category: ETF and Index News

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Manchester-headquartered AJ Bell, a provider of online investment platforms and stockbroker services, has introduced a passives-only managed portfolio service (MPS) aimed at financial advisers. The portfolios include significant allocations to exchange-traded funds (ETFs), with products from BlackRock‘s iShares and SSGA‘s SPDR ETFs featuring prominently.

AJ Bell launches passives-only managed portfolio service

Billy Mackay, AJ Bell Marketing Director.

The MPS consists of five portfolios, rebalanced on a quarterly basis, catering to a range of investors with varying levels of risk aversion. The portfolios are labelled ‘1-5’ with ‘1’ representing the lowest level of accepted risk.

The service is carefully designed to meet the needs of their clients, thereby fulfilling advisers’ regulatory obligations.

According to the firm, the key benefit of the service is to free up financial advisers’ time so that they can spend more of it with clients and focusing on core financial planning.

Billy Mackay, AJ Bell Marketing Director, commented: “Our focus has been to build a managed portfolio service that is easy to understand for both advisers and their clients, fits into the existing business processes of advisers and offers their clients a competitive deal.”

Each MPS portfolio charges an annual management fee of 0.25% plus VAT, and further levies ongoing fund charges (OCFs) depending on the costs of the underlying holdings as well as other miscellaneous items such as one-off charges.

MPS 1 aims to minimise risk of capital loss, with limited exposure to higher risk assets. The portfolio asset allocation is: fixed income (60%), cash (15%), overseas equity (14%), UK equity (14%) and alternatives (5%). Major ETFs holdings include: the iShares Core £ Corporate Bond UCITS ETF (15%), the SPDR Barclays Sterling Corporate Bond UCITS ETF (15%), the iShares Global High Yield Corp Bond ETF (5%) and the iShares UK Property UCITS ETF (5%). The OCF is 0.18%.

MPS 2 aims to grow assets in the long term, protecting against the effects of inflation, with a significant allocation to cash, bonds and other defensive assets. The portfolio asset allocation is fixed income (55%), overseas equity (21%), alternatives (10%), UK equity (9%) and cash (5%). Major ETFs holdings include the iShares Core £ Corporate Bond UCITS ETF (15%), the SPDR Barclays Sterling Corporate Bond UCITS ETF (15%), the iShares Global High Yield Corp Bond ETF (10%) and the iShares UK Property UCITS ETF (10%). The OCF is 0.21%.

MPS 3 aims to deliver long term capital growth and grow assets in excess of inflation. The portfolio asset allocation is: fixed income (45%), overseas equity (28%), UK equity (12%), alternatives (10%) and cash (5%). Major ETF holdings include: the iShares Global High Yield Corp Bond ETF (15%), the SPDR Barclays Sterling Corporate Bond UCITS ETF (10%), the iShares Core £ Corporate Bond UCITS ETF (10%) and the iShares UK Property UCITS ETF (10%). The OCF is 0.22%.

MPS 4 aims to grow assets in excess of inflation over the long-term, with a high proportion of equity holdings and limited exposure to defensive assets. The portfolio asset allocation is: overseas equity (40%), fixed income (35%), UK equity (10%), alternatives (10%) and cash (5%). Major ETF holdings in the portfolio include: the iShares Global High Yield Corp Bond ETF (15%), the SPDR Barclays Sterling Corporate Bond UCITS ETF (15%), and the iShares UK Property UCITS ETF (5%). The OCF is 0.21%.

MPS 5 aims to grow assets in excess of inflation over the long-term, predominantly investing in global equity and emerging market assets and lower holdings in defensive assets. The portfolio asset allocation is: overseas equity (48%), fixed income (20%), alternatives (10%), UK equity (12%),  and cash (5%). Notable ETF holdings include the: the iShares Global High Yield Corp Bond ETF (10%), the iShares UK Property UCITS ETF (5%), and the the SPDR Barclays Sterling Corporate Bond UCITS ETF (5%). The OCF is 0.19%.

All data as of the end of June 2016.

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