It is the fund prospectus that has to contain everything and must be kept up to date, as required by the regulator. Together with the audited report and accounts the fund prospectus should be the foundation of any UK authorised fund research.

Although similarly invested funds are mostly grouped together into sectors and pricing structures sort of simplify the universe, complexity remains because of different fund structure regimes.

With the ability of European fund structures passported and marketed in the UK, for example the Sicav structure, it isn’t going to change any time soon. Understanding how funds are structured must go hand in hand with thorough fund research and due diligence.

Frank Potaczek is head of Insight and Consulting (fund management) at Defaqto