BR Report 2019

23 22 CONSIDERATIONS FOR INVESTMENT OPEN OFFERS BY INVESTMENT STRATEGY Avg Mode Median Min Max Market Update / Sector Analysis Income producing strategies charging higher AMCs The gap between Capital preservation and income AMC, averaging 1.3% this year, and Capital preservation and growth AMC, averaging 1.23% this year, has narrowed. Last year the averages were 1.72% and 1.31% respectively, so both are dropping. It’s still interesting to note that where an element of income is required, the AMC is generally slightly higher. Notable jump in Growth target returns All strategies have seen an increase in their target returns this year, with the exception of Growth and income for which the average has dropped from 7.25% last year. Average target returns for pure Growth offers have almost doubled from 4.4% in 2018 to 8.7% in 2019. However, of the 20 pure Growth offers, which are all AIM focused, only one has provided a target return. While AIM has been relatively strong in the medium term, the downward pressure on prices experienced at the end of 2018 and the predicted volatility for 2019 make these average target returns seem challenging in the short term. This is why most AIM focused offers do not tend to give target returns. In fact, of all the AIM focused offers, only two give a target return figure. Growth strategies retain highest entry levels All minimum subscription levels have risen except for those applied to Growth and income strategies. Growth and Capital preservation and growth remain the highest, with the latter having grown from £40,250 last year. This points to managers looking for greater capital to access growth strategies. CAPITAL PRESERVATION & INCOME CAPITAL PRESERVATION & GROWTH GROWTH GROWTH & INCOME AMC 1.30% 1.23% 1.24% 1.33% TARGET RETURNS 4.88% 4.16% 8.70% 6.33% MINIMUM SUBSCRIPTION £40,000 £50,227 £54,500 £39,231 DIVERSIFICATION (NUMBER OF UNDERLYING COMPANIES) 1.2 6.1 26.3 22.1