Q1 2020: The quarter the world changed forever

Earlier this month we wrote an article for the May edition of Charity Financials Insider e-newsletter that discussed the impact that the coronavirus has had on charities’ investment returns.

According to the latest quarterly report produced by Teknometry and the Charity Investor Group, average returns for the universe was -14.59. In stark contrast, only last quarter the average annual return was 16.08%.

The full article can be found on the Charity Financials website here, or you can download a PDF copy here.

2019 — a good year for charity investments

Earlier this month we wrote an article for the February edition of Charity Financials Insider e-newsletter that analysed the investment returns of balanced discretionary charity funds during 2019, which has proven to be one of the most successful years on record.

According to the latest quarterly report produced by Teknometry and the Charity Investor Group, the average annual return for the universe, now consisting of 1,296 charities, was 16.08%.

The full article can be found on the Charity Financials website here, or you can download a PDF copy here.

Enhancements to Universe Reporting

In the latest Q3 2019 charity fund universe report that we issue to participants and subscribing charities, we continued to enhance the reports by providing additional information and charts.

We added a chart to show the individual period returns and provided rankings related to the size bands of charities within the universe

Individual Period Returns

The chart below shows how the Teknometry CIG Charity Universe net returns have performed each quarter since inception.

The following pie charts show the percentage of charities in each of the three same size bands according to their Rank. Rank 1 represents the top 25% performing charities in the universe whereas a ranking of 4 represent the bottom 25% performing charities for the quarter ending on 30th September 2019.

If you have any ideas or suggestions for other information you would like to see included in the universe reports please email us at support@teknometry.com and providing the information is available to us we will seek to add them in the future.

Participant Comparison Reports

As part of the calculation of the universe we also calculate each participant’s own universe so as a “house” you can see how the charity funds you manage have performed relative to the universe itself. While this information is available within the portal, we have developed a specific PDF report that contains the relevant information. If you are a participating manager and wish to see what this would look like for your organisation, please feel free to contact info@teknometry.com for more information.

Charity Financials Article

Earlier this month we wrote an article for the November edition of Charity Financials that analysed whether the relative size of charities within the Teknometry / CIG charity Fund Universe had any correlation with the returns they achieved.

In summary it was found that large charities performed better than their peers in positive markets but conversely performed poorer when returns were declining.

The full article can be found on the Charity Financials website here, or you can download a PDF copy here.

Brewin Dolphin Edinburgh chooses Teknometry

We are pleased to announce that given the success of delivering our Performance and Charity Fund Universe offerings to Brewin Dolphin, Teknometry have been to chosen to provide additional Performance Measurement and Attribution services to their wealth and investment management office, based in Edinburgh.

“Since 2013, we have had an existing relationship with Brewin Dolphin, so it is testimony to the continuing success of our provision to them that we have been chosen to provide further services to their Edinburgh Office.”

Phil Swann, Client Relationship Director, Teknometry

“We are excited to be working with Teknometry. As part of the learning process, we have been very pleased with the personal service we have received and in-depth help and support that has been on hand while we navigate the system. The capabilities of the system will help us to provide an enhanced level of data to our clients.”

John Moore, Divisional Director, Brewin Dolphin Edinburgh

Charity Fund Peer Group Universe Launched by Teknometry and the Charity Investors’ Group

Investment performance specialists Teknometry, today announced the launch of the Teknometry CIG Charity Fund Universe, which has been established in conjunction with the Charity Investors’ Group (CIG).

The Teknometry CIG Charity Fund Universe has been created to provide a representative peer group for the analysis of UK charity investment performance, initially in the multi-asset sector.

The universe has nine founding participant investment management firms that have provided five years of data on their balanced portfolios in order to establish the universe with a credible history from the launch. The five year history focused on total net return data and going forward Teknometry will be expanding the analysis to included asset allocation and yield data.

At the 30th June 2017 the Teknometry CIG Charity Universe was comprised of 1,352 portfolios representing over £14.6bn of UK charity fund assets.

The average UK charity fund returns for periods ending 30th June 2017 are shown in the table below.

Last 3 Months %Last 6 Months %Last 9 Months %Last 12 Months %

“The Teknometry CIG Charity Fund Universe is now the most representative peer group sample of balanced charity investment portfolios in the UK and will provide much-needed insight into the sector. Our aim is to expand the universe in terms of sample size and analysis over the coming months in order to provide further insight. We are grateful to the CIG and the founding participants for supporting this initiative, which has been a year in the making.”

Mick Brant, Managing Director, Teknometry

“I am delighted that Charity Investors Group members have come together to share their investment data. The resulting peer group will be a really useful comparator for charity investors, representing around 15% of all invested UK charitable assets.”

Kate Rogers, Chair of the Charity Investors’ Group

Second GIPS Forum to be held at SUPRA Conference

Teknometry director Anthony Howland will be a facilitator at the GIPS Forum, an industry body that is meeting at the Summit for Performance Risk & Attribution (SUPRA) later this month.

At the 2016 summit, this industry body is for those practitioners who deal with GIPS compliance within their organisation. Similar to the closed-door focus groups, the agenda will be fully attendee-led, bringing you and your counterparts’ top GIPS issues and challenges to the forefront of discussion.

Being part of the GIPS Forum gives you the opportunity to be represented as part of an industry-wide community. As part of this collective, no longer will you be alone when trying to gain clarity on guidance from the CFA Institute, or asking specific questions of your verifier – join together with your industry peers and be represented as one.

This is a closed session for those attendees who deal with GIPS within their organisations. The agenda will be devised pre-event and will include the top issues and challenges that have been submitted by participants.

Agenda points will be discussed amongst participants and this will be facilitated by industry specialists, including Anthony Howland of Teknometry.

Throughout the forum the group will decide on areas where CFA Institute clarification is needed/grievances are felt amongst the participants – post-event, the GIPS Forum will submit this to the CFA on behalf of its members. In the spirit of open and honest discussion, there will be no media in the room to ensure candid conversations.

The SUPRA Conference is being held on the 23rd and 24th November 2016 at the Grange Tower Bridge Hotel, London. Further details can be found at www.supraconference.com

Newsletter Summer 2016

Company and Industry News and Events

Cutter Research

Teknometry took part in a recent Cutter Research exercise, which was looking at performance, attribution and risk systems.

The last time this research was done was around 7 years ago and a great deal changed in this market since then. Cutter Research topics are driven by their members and this is clearly an indication of renewed interest in this area, as more firms are looking to replacing their existing systems. The results of the research are not publicly available, but were presented to members at an event in the City last month, where Teknometry was in attendance with a stand in the exhibition area.

PMAR Europe

PMAR Europe will be held on 15-16 June this year and promises a superb agenda covering all the regular topics in the exciting PMAR format.

Subjects include Alternatives, Risk, Index data and a number of Attribution themes. The speakers at PMAR are always first rate and we’d highly recommend attendance at this year’s conference.

For further information visit www.spauldinggrp.com/pmar-europe/

WM Performance Service

Following The WM Company’s decision to wind down some of their stand-alone performance measurement and reporting services we have seen an increase in the number of enquiries, particularly from clients of their Charity service.

As the Teknometry service is cloud-based, we are able to offer cost-effective performance measurement solutions to firms that may only have had a small number of portfolios on WM’s service. If your firm is looking to replace some of these services, please contact us to arrange a demo.

Exposure Draft of the Guidance Statement on Broadly Distributed Pooled Funds Released

After several years in the making, and an unprecedented amount of global industry feedback, CFA Institute have finally released the exposure draft of the Guidance Statement on broadly distributed pooled funds for public comment.

The working party and support team who have managed to agree on this Guidance Statement must be the largest group involved in any Guidance Statement to date and they must be congratulated on producing a paper which they all consider to be a viable set of requirements and recommendations into what is already a quagmire of local and global regulation.

The “broadly distributed pooled funds” umbrella includes a number of fund types which come in various guises; mutual funds, unit trusts, OEICs, SICAVs and it appears that a significant proportion of these will become subject to this guidance.

As such, it is vital that firms review the document in order to ensure that, when the final version is published and becomes effective (expected 1 Jan 2017), firms will know what they have to do and are prepared to do it.

The public comment period is open until 29th April 2016 and we would strongly urge anyone involved in pooled funds to read the document and also send comments to CFA Institute. Even if your comments are only to agree with the document, CFA urge you to respond.

Read the Exposure Draft in full here

Anthony Howland gives his thoughts on the 19th Annual Global Investment Performance Standards (GIPS) Conference

The 19th Annual Global Investment Performance Standards (GIPS) Conference was held in sunny San Diego last month, a refreshing change from its usual venue of Boston (where it returns next year).

Clearly it was the agenda, rather than the location, that was the appeal this year and provided the best ever attendance at the event with around 400 delegates. Whilst the vast majority of these were American, there is an ever increasing global presence and it was good to see a strong contingent of fellow Brits.

The opening address was given by Paul Smith who has been CEO of CFA Institute since the beginning of 2015. He is the first CEO to attend the GIPS conference and, clearly, is a strong advocate of GIPS; promising to allocate additional resources to what he described as the most successful endeavour of CFA Institute.

Not much has changed over the last year with respect to GIPS, but the one item that is noteworthy is the new requirement for firms to notify CFA of their compliance. This has been a discussion point for several years and, finally, came into force for 2015. A few statistics were provided and more will hopefully follow. Of the 1,572 firms currently claiming compliance, the vast majority (around 1,300) are US registered with the UK claiming second spot. Also noteworthy is the fact that 85% of these 1,572 firms are verified, proving that verification is very much norm.

With respect to the future of GIPS, a number of initiatives are underway but there is no plan for a new version of GIPS (as was the case for 2005 and 2010). There are a number of guidance statements on the horizon, but with the current process for these it is difficult for CFA to provide a definitive timetable. However, the first three should be within the next twelve months.

The Pooled Fund Advertising Guidelines have had a long and rough ride, predominantly due to the diversity of existing regulations around the globe covering these investments. However, the group have made great progress and a document should be issued before the end of the year.

The portability guidance statement should be available by Q1 2016 to assist the multitude of firms having undergone M&A activity and a revised guidance statement on supplemental information should follow that and, hopefully, will appear during the course of 2016.

Another project that is underway covers overlay strategies, where the definition of assets under management has always proved contentious and another group is being brought together to cover guidance on benchmarks.

A word of warning, though. These guidance statements were discussed by panellists at the conference and there have been a number of articles and blogs following the conference which have attempted to provide insight. Some of the articles and interpretations I have found to be quite misleading. The fact is that until the guidance statements are issued, nothing has changed, so please do not change your policies and procedures on what is essentially hearsay.

The conference covered a number of other interesting topics such as fees, active share and client reporting. Helpdesk sessions rounded off each day providing the audience with the opportunity to get an immediate answer to some tricky questions. It’s not always easy to be put on the spot and, with the questions being written rather than verbal (sometimes by what may have been an illiterate spider), the helpdesk team did as good a job as was humanly possible in providing insight.

Overall an informative and enjoyable event, and so we hope to see you in Boston next ‘fall’.

Anthony joined Teknometry in September 2014 to spearhead the development and launch of our new GIPS Composite Administration Management solution, TekGAM, which was announced in April this year.

If you would like further information on TekGAM click here or please contact us on 0113 347 1320 or email info@teknometry.com