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Misleading Labels - Examples

Misleading Label - Example 1

 

On 30th March 2020 we received an email from a well known investment company promoting the performance of one of its funds labelled as Risk level 5. 

 

We tested the 3 year volatility (risk level) of our Risk Level 5 fund and 24 other funds also labelled risk level 5.

 

Out of these 24 funds that were claimed to be Risk level 5:

The LOWEST had volatility of  = 7.27%

The Brunswick Portfolio (Risk level 5) had volatility of  = 8.81%
The HIGHEST fund had volatility of  = 11.31%

How can ALL of these 24 funds from 11 different investment companies be labelled Risk level 5 ?

 

With Brunswick if you chose Risk level 5,  you get Risk level 5, and we maintain it at Risk Level 5.

This is because our investment methods are reliable.

Misleading Label - Example 2

 

In the chart below, A, B, C and D are investments advertised as having increasing levels of risk offered by “X” a well known investment company.

5 Year Returns v Risk to 01/04/2019 from Brunswick and Company "X"

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The Brunswick Accumulation Portfolios 4, 5, 6, & 7 are similar investments offered in the same period.

Investors reasonably expected that if they invested in B, they would get more return than in the lower risk investment, A. This was clearly not the case!

However, the chart shows investors in A and B received almost the same return.

 

Investors in C took less risk than investors in D but also got the same return!

 

With the Brunswick Portfolios you can expect more risk to give more return.

The Brunswick Investment Solution is constructed so that the investor and their adviser can choose the Brunswick Portfolio(s) with the appropriate risk level for their General Investment Account, ISA Account, Pension Account and Investment Bond.

Clearly investments with reliable risk levels, such as the Brunswick Portfolios, are vital.

 

However they need good investment performance as well. For example Brunswick Diversified 5 Year Performances v Sector

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