The Barclays Funds List
Selected by Barclays’ investment specialists, it is a list of funds that have built solid reputations and established sound investment processes.
Remember that Smart Investor does not offer financial advice, so you must decide how to invest your money. The criteria outlined here can only help you narrow down the choice. Investing in funds is like any other type of investment. The value of your investment can fall as well as rise. You might not get back the amount you invest.
What’s the Barclays Funds List?
The Barclays Funds List is one filtering option we offer to help you narrow down the wide range of funds available for you to invest in.
Based on our research, we believe these funds may have the potential to generate consistent returns over the medium to long term (five years or more), although equally, they may not do this, and you could get back less than you invest.
This isn’t an exhaustive list – there are plenty of other funds that may actually be more suitable for your portfolio. We’re not recommending any of these funds – it’s up to you to decide which, if any of them are right for you. It’s important to fully understand what you’re investing in, so if you’re not sure about anything, please seek professional advice. If you choose not to seek advice, then you should also consult other material about funds, including any factsheets, reports and Key Investor Information Documents that are available.
Our Funds List
How do we select funds for the list?
Our list currently features 34 funds that may offer the greatest potential for consistent returns in the medium to long term, covering a variety of sectors, assets and global markets.
Remember, however, that there are no guarantees that they will provide consistent returns, and like any investment, their value can fall as well as rise. We've used the same process to select the funds for a number of years. One of the key criteria that we assess is the relationship between risk and return. What this means is we compare the amount of risk the fund manager has taken to achieve the expected returns. We also analyse the consistency of the fund manager's approach, past returns and the experience of the rest of the fund's investment team.
Once we feel that a fund meets our high standards, we start the next stage of the process which involves extensive due diligence. Our manager due diligence process can be divided into two distinct steps: investment due diligence, and operational due diligence.
Investment due diligence looks for the best-in-class managers and to do this we use what we call our ‘5P’ research framework whereby five key areas (Parent, People, Philosophy, Process and Performance), are assessed and scored. A good score in each of these five areas is critical to the likelihood of future success. Read more about this selection process here.
Operational due diligence aims to assess and mitigate business and operational risks. By this we mean the business resources and processes needed to support the investment activities and operational know-how needed for the manager to execute and sustain the investment strategy.
Then our team of investment professionals comes to a joint decision about whether or not the fund deserves to be included in the list. This helps us make sure our decisions are consistent and free from individual bias.
How do you choose the right fund?
When choosing a fund, consider whether it will help you achieve your investment goals and you feel comfortable with the risks associated with the fund. You can search the list by sector or sort it by key metrics such as previous performance, ongoing charges or Crown Rating (a measure of past performance developed by independent rating agency FE). You should also read through the fund factsheets and any Key Investor Information Documents (KIIDs) that are provided by fund managers. These documents are intended to describe the risks associated with each fund, which it is important you understand before investing.
Please note, through our due diligence selection process, we may also decide to remove funds from the list. We will not let you know when that happens, so you may wish to continue to refer to the list to find out whether we have removed funds from the list. In any event, you should regularly review your investments and make sure that any funds that you select continue to meet your investment needs.
While a fund gives greater diversification than buying shares in one or two companies, you can dilute the overall risk further by investing in a number of funds which have different types of underlying holdings and for example, different geographic and sectoral focuses. If building a diversified portfolio sounds like a daunting task, there are solutions available, like Multi-asset class funds, which invest across a range of asset classes and regions, offering a globally diversified one-stop solution for investors. You can read more about diversification here.
Don't forget, past performance is not a guarantee of future results.
The IA (Investment Association) represents investment managers in the UK. It divides funds into 30 different sectors, usually based on the type of assets within the funds, and may also focus on a particular geographical area or investment strategy. You can use the sectors to help you navigate around the funds universe.
Some fund managers have particularly strong track records when it comes to generating returns. As with past performance though, a fund manager can't guarantee future results so don’t base your decision on a manager’s strong track record alone.
FE Crown ratings
Looking for an independent perspective? Crown ratings, devised by ratings agency FE (formerly Financial Express) are designed to highlight funds that have had superior performance and consistency on a risk-adjusted basis, relative to their peer groups using a benchmarking process. A single FE Crown Rating reflects the lowest tier and a five FE Crown Rating the highest tier. Again though, you need to bear in mind that past performance is not a reliable indicator of future performance.
Charges eat into your profits so think carefully about how much you're willing to pay. Bear in mind that actively-managed funds, where a fund manager selects the stocks they believe will provide the best returns, tend to have higher charges than passive funds such as index trackers or Exchange Traded Funds (ETFs) which usually mirror the performance of a particular index like the FTSE 100.
Past performance can be a useful indicator of the sorts of returns a fund has provided so far, but it is not a reliable indicator of future results. So while you may want to take past performance into account, don't rely on it exclusively when choosing which funds to invest in.
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