ARC benchmark MPS Index goes live with performance data back to 2013

The new indices, which are free for IFAs, track performance from 2012 and include model portfolios on adviser platforms together with funds that mirror MPS strategies.

ARC Research, the UK’s leading provider of peer group performance analytics, has today published the ARC Managed Platform Solutions (‘MPS’) Indices – to give financial advisers clarity on the performance of MPS managers with a universal-standard comparator index series for MPS solutions.

Derived from approximately 750 models from around 60 investment managers, the new indices are asset allocation-based and calculated net of manager fees. The asset allocation categories are 0-20%, 20-40% 40-60% 60-80% and 80-100%. The first performance figures for Q1 2025 are published today in the table below.

The average performance of MPS models from 2013 to Q1 2025

^•31 December 2012

Over the past 20 years, the ARC Private Client Indices (‘PCI’) have become the benchmark for the private wealth industry in understanding investment performance. Using its expertise in performance analytics, it has now followed suit with MPS Indices for financial advisers. 

Dan Hurdley, Managing Director at ARC Research, says: “The new ARC MPS Indices provide a valuable peer group return comparison for MPS model offerings allowing MPS models to be ranked according to a range of return and risk metrics. The ability to place MPS into a peer group context should greatly assist IFAs seeking to recommend MPS solutions to their clients.

“Until now, many IFAs have used the ARC PCI as a proxy for comparison against model portfolio solutions but there are distinct differences between the two. The new MPS Indices will give IFAs a more accurate and appropriate reflection of a solution’s performance against its peers.”

The new MPS Indices are constructed using performance and asset allocation data submitted by participating providers classified based on equity exposure over a rolling three-year period. The Indices are calculated net of investment fees such as investment management charges and underlying instrument costs but importantly exclude platform and adviser charges. The actual investor outcome will vary depending on the individual fee arrangements charged by the adviser and platforms.

Ranking functionality will be available later this year for IFAs to further support comparison between models, while ARC is also providing an ARC Medal rating for all eligible MPS solutions* – platinum, gold, silver and bronze. Good past performance may be due to luck or good judgment, or the MPS solution might have achieved high returns by taking on more risk. Equally, returns may be higher than expected because the market itself is booming. 

Created some thirty years ago, the ARC Medal rating system provides a performance assessment for MPS solutions that places return into context versus peer group by examining return; risk; style and trend.

The new index launch coincides with the continued growth of the MPS market, driven by evolving client demands and changing market dynamics. The popularity and rapid growth in MPS is confirmed by recent research undertaken by Equisoft. This research found that 51% of IFAs were using MPS solutions for more than half of their clients. Growth in MPS is expected to continue, with almost 70% of IFAs expecting to allocate more client assets to a greater number of solutions in the future.

Hurdley adds: “With a strong desire by MPS providers and IFAs to be able to compare MPS offerings on a level playing field, the ARC MPS Indices have been constructed to sit alongside and complement the ARC PCI.

The ARC MPS Indices are available with both a monthly and daily resolution. Daily estimates are available on www.suggestus.com for registered users.