Data provider FE is to launch five new multi-asset sectors later this month based on risk ratings to help users compare funds in an increasingly complex space.
The sectors will run from low to high risk, using FE's own risk score data to determine which funds go where.
Each sector will have its own name, but will come under the Risk-Targeted Multi-Asset Solutions universe which FE has created.
The FE risk score is collated by looking at the historic volatility of funds versus the FTSE 100. In terms of the spectrum of scores, cash is zero, and the FTSE 100 has a score of 100, with funds receiving their own score in comparison.
Some are more volatile than the FTSE 100, and therefore have a higher score. The Neptune Russia and Greater Russia fund, for example, has a risk score of 156.
In total, 250 funds will populate the indices, with portfolios including Architas' Multi-Asset range and SLI's MyFolio range, run by Bambos Hambi, featuring.
Michael Holland, managing director of FE, said the new sectors - which will rival the IMA's Mixed Investment sectors - will help advisers invest their clients into multi-asset funds.
"Advisers have told us they find it very difficult to find risk-targeted funds among the current IMA sectors, and therefore we have created this risk-rated universe for them," he said.
"These sectors will allow advisers to see which multi-asset funds have performed well based on the risk they are taking."
The sectors will appear on FE Trustnet later this month.
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