• Our AoV review process • Glossary • List of service providers • Important information • Contact us
A complex review process using multiple sets of data, across seven criteria and analysed on a fund by fund basis, the board of BNY Mellon Fund Managers Ltd has honed its methodology over the past year since the Assessment of Value was introduced. Here is a simplified flow chart outlining our process.
ACD: The ACD is legally responsible for the day-to-day management of the fund and must ensure that the fund is managed within the applicable regulation.
Absolute return fund: An investment vehicle with 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 (AMC): 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.
Back-tested: A term used in modelling to refer to testing a predictive model on historical data
Benchmark: A standard, typically an index, against which the performance of a fund or investment manager is measured.
Bond: A loan of money 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.
Convertible: A bond that can be converted into common stock.
EGM: Extraordinary general meeting of shareholders.
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.
Index: A portfolio of investments representing a particular market or a portion of it.
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.
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 (OCF): The amount an investor will pay for the services provided by a fund. The OCF is made up of the manager's fees along with other costs, such as administration. It's meant to be used as a standardised method to compare the costs of funds.
Open-ended: A collective investment scheme that can issue and redeem shares at any time.
Platform: A service that allows fund investments to be bought online.
Retail price index (RPI): Measures the change in the cost of a representative sample of retail goods and services. It a measure of inflation published monthly.
Risk/reward: The possible profit a particular activity may make, in relation to the risk involved in doing it.
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.
UCITS: Undertakings for the Collective Investment in Transferable Securities is an EU regulatory framework that guide what open-ended (see above) funds can and can't do - such as restrictions on holdings.
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.
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.
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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.
Date of publication: 27 July 2021
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.
Write to: BNY Mellon Fund Managers Limited. Client Service Centre PO Box 366 Darlington DL1 9RF
Retail investors call/email: Tel: 0800 614 330/ +44 (0)20 3528 4002 Fax: 0870 275 0010/ +44 (0)20 7964 2708 Email: clientservices@bnymellon.com
Institutional investors call/email: Tel: 0344 892 0149/ +44 (0)20 3528 4157 Fax: 0844 892 2716/ +44 (0)20 7964 2708 Email: institutions@bnymellon.com
Pension funds and charity organisations call/email: Tel: 0344 892 2715/ +44 (0)20 3528 4070 Fax: 0844 892 2716/ +44 (0)20 7964 2708 Email: pfco@bnymellon.com