Square Mile Fund Performance

 

Square Mile use a traffic light system to report on the funds which we cover. This is designed to be easy to read, easy to interpret and give a good snapshot of how the funds recommended by Square Mile are performing.

When rating funds it is very important for us to understand what purpose the fund will serve for the end investor, what the journey will be like to get there and exactly what the fund manager is setting out to achieve. We therefore evaluate funds in a number of ways, looking to assess whether they are meeting their desired outcomes and whether they are achieving their performance targets over the specified time period. The below table highlights the criteria used to measure the performance target.

Status

Criteria

Green

Meeting outcome, above performance target over specified timeframe

Amber

Meeting outcome, below performance target but above benchmark over specified timeframe, or, if the benchmark and the performance target are the same, below benchmark, but only marginally

Pink

Not meeting outcome and/or below benchmark – the reasons for underperformance are understandable and reasonable

Red

Not meeting outcome and/or below benchmark – the reasons for underperformance are not understandable and reasonable

 

The Academy of Funds is made up of a diverse range of strategies. This is likely to mean that different funds perform well at different points of the cycle.

We would not expect every fund in the Academy to be a green at any one time and would actually be concerned if this were the case. We undertake to meet with the fund manager of any red fund as soon as reasonably possible and do not expect any fund to remain flagged as red over the longer term. If we believe that poor performance is fully explained but remains an issue we will move the fund to pink status.

We will continue to monitor such funds closely and we want to make sure that the reasons for the underperformance are still valid. It is unexplainable underperformance which is worrying, and which would trigger alarm bells - unexplained underperformance means either that the manager is drifting from his or her stated style or that the process is not repeatable. Either way we would have concerns over the fund and it would be removed from the Academy.

Summary performance of the Academy of Funds

 

*Of which 16.4%, 21.0%, 22.1%, 23.3%, 19.2% and 16.6% respectively are amber (in line with the outcome, the rest are ahead of outcome).

Data as at 31st May 2019.

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