Shedding light on funds
The fund market information service, FERI FMI is making further strides in its coverage of cross-border funds distribution. The firm already offers a directory, a growing number of in-depth single market reports and various sales analysis tools. Its latest product, FundFile, is the culmination of many months of research and a considerable amount of number crunching.
FundFile is an on-line data service, with content on over 1,300 management groups and 21,000 funds. In terms of coverage, it is the most comprehensive survey of European fund marketing trends yet produced. Its aim is to allow fund chiefs to understand their true competitive position and to set targets based on meaningful assessments of distribution opportunities and investor appetites. It is also the perfect tool for analy-sing the business of competitors.
The problem has always been that the quality of information was so variable from one country to the next. Rodney Will-iams, joint
managing director of FERI FMI in London, says: “If you stand back and look at the retail fund market across Europe, even after 15 years of UCITS in action, it’s still pretty opaque.”
Based on its considerable experience in information gathering across Europe, FERI FMI has observed that in most of the markets, no-one is measuring the activity of foreign groups and cross-border business is lost within home domicile calculations (ie, Luxembourg, Dublin and UK OEICS). Williams says, “Interestingly Dublin is one of the worst at providing data. Luxembourg has come a long way and CCLux now has every fund’s details on-line with data feeds for sale. Dublin seems to have lost the plot in a complacent view that providing data is just one more task they have to do, and they are busy enough thank you.”
Increasingly funds are creating institutional share classes but in an irregular nomenclature fashion. B shares, C shares, I shares, X shares depending on the promoters’ style. FundFile is tracking every fund currently at fund level only. The individual fund profiles list all the share classes available where they are authorised for sale and what the prospectus quoted fee level is. FERI FMI has discussed researching each of the share classes with each promoter, to understand how they name institutional funds and then creating a search/interrogation field for this.
Is there an application for this service within the institutional investor market? Williams believes the picture is not so clear: “Institutional business is often very discrete and not easy, if not impossible, to track accurately. There is a growing trend of institutions using registered pooled product.”
“Would an institution or pension fund find FundFile useful? In some ways, yes, but other work would be needed to be used in parallel. We are carrying data on every fund from 18 European domiciles and categorising them by individual investment type and focus. An institutional portfolio manager wanting to make a pooled product investment in a certain sector can now scan every available fund across Europe, both cross-border and domestic. The FundFile reports can be exported into own systems for further interrogation ie by size, domicile, charging, net sales, and asset history. This then can be used with performance scanning on other systems. FERI’s Investbase system for example (but this only covers funds authorised in Germany, Austria, Switz and Italy). Nowhere else would give a solid overview of all the funds attributes and key facts.”
Currently, Williams estimates the service has something like 75% coverage of European funds. When finished it will have 95%.