ANNOUNCEMENT: Expert Investor is now PA Europe. Read more.

cerulli fund groups fail to convey philosophy

European fund selectors prioritise investment philosophy, yet asset managers generally fail to communicate their approach to such investors in a satisfactory manner, a study reveals


The inaugural Cerulli European Fund Selector report, which is based on a survey of 153 European investors conducted in the first half of 2013, as well as more than 70 qualitative interviews, finds that two-thirds of respondents rate investment philosophy as the most important criteria when selecting funds.

However, many selectors complain that fund groups do not properly articulate their approach – a problem apparently linked to manager access, another key priority for such investors.

“Although most selectors prefer direct contact with the portfolio managers, other key players in the selection process can relieve the burden, such as product specialists – a mixed bag ranging from laudable American players to those that are more hindrance than help”, wrote Cerulli associate director Fiona Maciver, one of the authors of the report.

Further illustrating the importance of the manager/client relationship, Cerulli notes that selectors are most likely to remove a fund from their buy-lists following a manager departure. In contrast, survey respondents will tolerate poor fund performance “if a good explanation is given”.