Past performance could soon be included in key features documents (KFDs) under the latest FSA propos...
Past performance could soon be included in key features documents (KFDs) under the latest FSA proposals in its Raising Standards disclosure drive.
Implementation of the FSA's consultation paper 170, Informing consumers: product disclosure at the point of sale, would see UK legislation moving to meet the requirements of the Ucits III directive, despite the FSA's own reservations on the value of past performance data to consumers when choosing a fund.
The presentation of this data is likely to comprise a combination of cumulative and discrete returns over a five to 10-year period so as to stand performance data alongside some measure of a fund's volatility. This will be presented in a sterling format rather than as percentages although the FSA is unclear about whether to include a benchmark, fearing consumers will focus on this rather than the underlying investment strategy of the fund and reasons for past out- or underperformance.
CP 170 also proposes replacing existing key features documents with revised key factsheets.
The factsheets, which would be uniform across the industry, would carry prominent key facts and FSA logos and simplify much of the content for consumers.
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress