Indices

An index is a list of companies, showing their financial performance, that can help investors compare and calculate general market performance.

The skill in investment management is to design a suitable portfolio which will meet an individual investor’s needs. Used properly, an index series can provide a useful perspective on the world of stocks and shares to compare against the performance of your own portfolio.

PIMFA provides the methodology for two index series:

–   The MSCI PIMFA Private Investor Index Series

–   The MSCI PIMFA Equity Risk Index Series

Both of these index series are designed to represent their respective weightings, show returns of selected multi-asset-class strategies and are used as benchmarks to compare the performance and returns of private client investment portfolios.

The MSCI PIMFA Private Investor Index Series

Under different names following organisational re brands, this series has been in existence since 1997.

This series consists of five composite indexes  and includes weightings of Equities, Fixed Income, Real Estate, Cash and Alternatives.

Read more about the Committee who decides the Private Investor Indices Asset Allocation here.

Private Investor Index Series

The MSCI PIMFA Equity Risk Index Series

This series was launched on 1st November 2019 following the changing demands of the market and our members.

This series consists of five composite indices and includes weightings of equities, bonds, real estate and “alternative” investments based on the strategic asset allocations (SAA) of PIMFA member firms grouped by the percentage of equities held in the strategies.

Read more about the Committee who decides the Private Investor Indices Asset Allocation here.

Equity Risk Index Series

There are five composite indices , to reflect the differing aims of investors

  • the Conservative index
  • the Income index
  • the Growth index
  • the Balanced index and
  • the Global Growth index

What this Index Series can provide

  • A basis for discussing and reviewing the asset allocation and structure of your portfolio with your fund manager or stockbroker.
  • A benchmark for assessing and comparing the performance of discretionary fund managers.
  • A measure to compare the performance of similar Income, Growth and Balanced based funds.

There are five composite indices , to reflect the differing aims of investors

  • Equity Risk 1 Index (RBI 1) – Equity 10 – 25%
  • Equity Risk 2 Index (RBI 2) – Equity 26 – 46%
  • Equity Risk 3 Index (RBI 3) – Equity 47 – 66%
  • Equity Risk 4 Index (RBI 4) – Equity 67 – 85%
  • Equity Risk 5 Index (RBI 5) – Equity 86 – 100%

What this Index Series can provide

  • Risk characteristics to align to client risk profiles more readily.
  • These represent the strategic asset allocations of member firms to help firms/individuals understand long term strategy of the UK market.
  • Created due to demand from member firms who wished to see a new range of indices based on this new methodology.

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