and Contact Information
Absolute return fund: A type of investment vehicle which has a goal of producing a profit over time, irrespective of the stock market. Typically such vehicles use different strategies to make a return even when markets are falling, although this is never guaranteed.
Annual Management Charge: An ongoing fee paid to the management company for managing an investment, usually charged as a percentage of the investment.
Assets under management (AUM): The total market value of the investments that a person or entity manages on behalf of clients.
Authorised Corporate Director: The ACD acts as an independent steward protecting the interests of investors in a fund. Overseeing the investment manager to ensure the fund is run in accordance with its stated objectives and with FCA rules and principles, the ACD has the ultimate regulatory responsibility for a fund and is accountable to the UK regulator, the Financial Conduct Authority.
Basis points: A common unit of measurement for percentages in finance. One basis point is equal to 1/100th of 1% or 0.01%.
Benchmark: a standard, typically an index, against which the performance of a fund or investment manager is measured.
Bond: A loan of money by an investor to a company or government for a stated period of time in exchange for a fixed interest rate payment and the repayment of the initial amount at its conclusion.
Equity: Shares issued by a company, representing an ownership interest.
FCA: The Financial Conduct Authority is responsible for oversight of the UK asset management industry.
Fund of funds: A fund that invests in other funds, which in turn have varying objectives and could be invested in either shares or debt of companies.
Fund umbrella: a collective investment scheme that exists as a single legal entity but has several distinct sub-funds which operate and trade as individual investment funds.
Hedge: an investment position intended to offset potential losses or gains that may be incurred by a companion investment.
Index: A portfolio of investments representing a particular market or a portion of it. For example: The FTSE 100 is an index of the shares of the 100 largest companies on the London Stock Exchange.
Institutional investor: A company or organisation (such as pensions and insurance companies) that invests money on behalf of other people.
LIBOR: The London Interbank Offered Rate - a rate that some of the world’s leading banks charge each other for short-term loans.
Multi-asset fund: A portfolio or investment which is invested in a combination of different assets, such as cash, fixed income and shares.
OEIC: an open ended investment company – this is a fund umbrella that operates as a company and which holds a number of sub-funds, each with their own objective.
Ongoing Charge Figure: this is the amount in percentage points, an investor will pay for the services provided by a fund. The OCF is made up of the fund manager's fees for running the portfolio, along with other costs, such as administration. It's meant to be used as a standardised method of comparing the costs of funds.
Platform: A service that allows fund investments to be bought online.
Retail investors: An individual, non-professional investor in funds who tends to purchase securities for their own personal accounts. They often trade in smaller amounts compared to institutional investors.
Share (or unit) class: An investment fund has different types of shares (or units in the case of a unit trust) investors can buy. Each ‘class’ has varying benefits and drawbacks.
Unit trust: A type of open-ended fund structure, set up under a trust deed. The investor is effectively the beneficiary under the trust.
Volatility: Large and/or frequent moves up or down in the price or value of an investment or market.
• Administrator: independently verifies the assets and valuation of the fund. • Auditor: authorised to review and verify the accuracy of financial records and ensure that companies comply with tax laws. • Custodian: holds customers’ securities for safekeeping to minimise the risk of their theft or loss. • Depositary: is an entity that acts in a safekeeping and a fiduciary capacity for a fund, providing global custody services. A depositary acts as a custodian. • Fund accountant: Responsible for the day-to-day accounting for one or more assigned funds. It is their responsibility to prepare timely and accurate Net Assets Values (NAV), yields, distributions, and other fund accounting output for review. • Transfer agent: Also known as the registrar, they are the trusts or institutions that register and maintain detailed records of the transactions of investors.
FCA’s criteria for analysis:
Performance: The net-of-fees return provided to investors in the fund, this is to be measured over the appropriate timescale and against the fund’s objective, as stated in the prospectus.
Quality of service: The range and the quality of service provided to holders of the fund. This is to take into account services provided to the fund by third parties, along with the services investors receive.
Comparable Market Rates: A comparison between the charges of the fund and those levied by similar funds in the market. Comparability is determined by the size, investment objectives and policies of the fund.
Comparable Services: This is an internal comparison, similar to comparable market rates but based on comparable services offered by the firm.
Costs: A breakdown of all costs borne by the fund, and an identification of whether that charge was fair or not. Costs will not only related to annual charges but also other costs charged by the fund, relative to the cost base.
Economies of scale: An assessment of whether savings were able to be achieved due to greater fund size and whether these savings were passed on to investors.
Classes of shares/units: An assessment of whether all the investors within a fund are in the appropriate investment class, and whether they could be in a cheaper class for their investor type and investment amount.
This is not a financial promotion.
BNY Mellon Fund Managers Limited is authorised and regulated by the Financial Conduct Authority. A member of the Investment Association. BNY Mellon Fund Managers Limited is registered in England No: 1998251. A subsidiary of BNY Mellon Investment Management EMEA Limited.
Registered office: BNY Mellon Fund Managers Limited, BNY Mellon Centre, 160 Queen Victoria Street, London EC4V 4LA
BNY Mellon Fund Managers Limited Client Service Centre PO Box 366 Darlington DL1 9RF
Retail investors Tel: 0800 614 330/ +44 (0)20 3528 4002 Fax: 0870 275 0010/ +44 (0)20 7964 2708 Email: clientservices@bnymellon.com Institutional Investors Tel: 0344 892 0149/ +44 (0)20 3528 4157 Fax: 0844 892 2716/ +44 (0)20 7964 2708 Email: institutions@bnymellon.com
Our phone lines are open Monday to Friday 8.30am until 5.30pm, UK time. Telephone calls may be recorded for monitoring and training purposes.
Pension Funds and Charity Organisations
Tel: 0344 892 2715/ +44 (0)20 3528 4070 Fax: 0844 892 2716/ +44 (0)20 7964 2708 Email: pfco@bnymellon.com
