Group provides an HSBC guide to the characteristics of its closed end funds
Dresdner RCM Global Investors has completed an independent risk assessment of all its investment trusts, undertaken by HSBC.
The process included both a quantitative screen to assess the level of risk on a portfolio by comparing its volatility of NAV returns against the FTSE All-Share over one and three year periods.
There was also a qualitative screen on the structure of each trust as well as the concentration of the portfolio, mandate, investment style, gearing policy, capital structure and volatility depending on the types of assets held in each portfolio.
Dresdner, which has 12 trusts, commissioned the research to provide a greater degree of clarity for investors and to make it easier for them to assess the potential volatility of Dresdner trusts in the absence of any industry wide risk rating process.
Simon White, head of investment trusts at Dresdner, said: 'This is something that the industry should do as a whole. By providing independent risk analysis of our investment trusts we are essentially signposting them, giving them helpful guidance on the potential risk characteristics.'
He said this was a time of a lot of concern about elements of the investment trust sector and as the industry builds on its recent success in attracting private investors there is increasing need to provide clear independent analysis.
White added that none of the risk ratings were a surprise. Three of its conventional trusts are rated above average in the risk, Charter European, Dresdner RCM Emerging Markets and Kleinwort Development Fund, while Dresdner RCM Smaller Companies has a risk rating of slightly above average.
The Brunner and Merchants trusts have both been given average risk ratings, while Dresdner's four endowment funds are risk rated below average.
On its two split-capital trusts, Dresdner RCM Growth Income has a below average rating on its zero share class and an above average rating on its highly geared ordinary shares.
Jos Holdings has below average ratings on its zeros and income shares, and an above average rating on its capital shares.
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