Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
The AJ Bell Favourite funds list is designed to lighten your research load. There are thousands of funds out there – so we’ve narrowed the field by selecting a high-quality shortlist of funds we believe can deliver their objectives over the long term. To make the list, each fund needs to pass our robust, independent selection process.
What have we changed?
We keep our Favourite funds list under constant review to ensure we have the highest conviction in the funds it features. At the same time, we keep an eye open for alternative funds that may have better potential to achieve their objectives or represent better value.
As a result of this work, we’ve recently made some changes to the trackers on our list:
Removed:
iShares Japan Equity Index Fund D Acc
Added:
Fidelity Index Japan P Acc
Why have we made these changes?
Firstly, keep in mind that when we remove tracker funds from our list, it isn’t necessarily because we see any issues with those products. Our changes aren’t a recommendation to switch, but simply represent what would be our favoured choice for that particular asset class in the marketplace today.
Also, when switching from one product to another, you incur costs in the form of dealing fees and commissions, so it is important to consider these fees, as part of any decision before changing your current tracker investments.
The iShares Japan Equity Index Fund tracks the FTSE Japan Index, a measure of large and mid-cap stocks in Japan. Whilst the fund is efficiently priced and has done a good job of tracking its benchmark index, the Fidelity Index Japan Fund has delivered superior performance, over a significant timeline and at a similar price point. The Fidelity fund tracks a slightly narrower benchmark, the MSCI Japan NR Index, however, the index characteristics, underlying holdings and allocations are very alike to those in the FTSE Japan Index, such that we don’t feel investors are impacted by this change in benchmark. We do, however, feel they will benefit from the improved tracking and return profile seen on the Fidelity fund, as a result of this switch.
Fidelity International, also referred to as Fidelity, is the group of companies that comprise FIL Limited and its subsidiaries. It is a dedicated investment management company that was established in 1969 and now operates in over twenty-five locations worldwide, with over £600bn assets under management (AUM), globally. Fidelity is a privately held firm, majority owned by senior management and founding family interests, with charities making up the balance.
Geode is a Boston-based institutional asset manager founded in 2001 that specialises in managing index investment strategies. Geode’s equity index investment experience combined with a disciplined investment process, sophisticated technology, and a robust infrastructure, make Geode a leading provider of equity index-based strategies. Fidelity has appointed Geode Capital Management as sub-advisor responsible for investment management on its range of UK domiciled equity index funds, including the Fidelity Index Japan fund. This sub-advisory structure means the investment of the funds is managed by Geode, whilst the funds are administered and distributed by Fidelity. Fidelity also oversees the fund, from a regulatory and compliance perspective.
We hope you find this update useful. Please remember that it falls to you to monitor and manage your own investments and to make any changes you think are necessary. Keep in mind this is information only, and not a personal recommendation to buy or sell any of the funds referenced above.
Written by:
Terry McGivern
Terry’s career in financial services began in 2005 on the settlements team at a major bank. He later moved to an investment management company and then a leading provider of financial services. In 2010 he took up a proprietary futures trading role at one of the world’s largest independent global commodities brokers. Prior to joining AJ Bell Terry spent five years on the Investment Management Team at a discretionary investment manager in Liverpool, where he was also a member of the Asset Allocation Committee.
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