IFB increases access to Danish management statistics
IFB, the Danish Investment Fund Association, has moved to publish additional performance statistics that will increase accessibility to data on active share and tracking error for actively managed funds.
The Association said the move was intended to facilitate access to relevant information for advice and to contribute to the ongoing debate around active management.
Currently domestic funds – so-called investment associations – report key figures to IFB, which are published on www.investering.dk. Going forward, where an active share is below 50 and a tracking error is below 3%, then IFB will require the fund to outline its investment strategy in annual reports.
Anders Klinkby, CEO, said that the requirement came amid ongoing debate about funds that are not being managed actively enough.
“An investment fund, which is marketed to savers as active should of course be active. The industry therefore wants to offer more information about the degree of active management and contribute to qualify the debate.”
IFB notes that there is not defined limit for active management, and that an active share is very much linked to market movements, as is tracking error in terms of market volatility.
Also important when considering the degree of active management is the fund’s return in relation to its benchmark and the cost levels that are included in the calculation.
Increased opennes around the figures offers the opportunity for a more nuanced debate, Klinkby adds.
“An example is Danish equity funds. They have pretty much all low values for both active share and tracking error, because the Danish equity market is fairly concentrated, and because volatility has been low. In any case a large proportion of the funds have offered positive returns. This points to many of the Danish portfolio managers being good a selecting the right equities and creating value for their customers.”
The statistics on active share and tracking error can now be found at www.investering.dk/active-share-og-tracking-error where they will be updated semi-annually going forward.