The ARC PCI estimates are statistical approximations of private client performance, calculated to provide insight into expected returns when actual data is not yet available.
What is the difference between the estimated and published numbers?
The published ARC PCI Series reflects real-world private client performance. The estimates are derived using statistical methods to provide a "best guess" of performance but are not based on actual client data.
How are the estimates calculated and what are their underlying constituents?
Estimates are generated through statistical modelling, which seeks to create a model portfolio whose historical returns closely match actual PCI results. The model portfolio’s predicted returns form the basis of the estimates. This model is updated quarterly following the publication of the ARC PCI Series.
Each month-end, the results of the daily estimates model are compared to a range of other indicators and considered in-light of the market environment. ARC may revise the final month-end estimate where it judges that the model results do not fully reflect the expected outcome for the relevant peer group. The daily estimate series will be refitted to the published month end estimate.
The model portfolio consists of up to 16 Exchange Traded Funds (ETFs) designed to represent the broad asset class exposures typical of private client portfolios. However, as these models are not intended for actual investment, ARC does not disclose the individual constituents.
Where do you get the asset allocation from and can I access historical data?
ARC does not collect asset allocation data from managers. Instead, the estimation process determines an index’s exposure to market risk and return factors based on the underlying constituents.
Historical asset allocation calculations are exclusive to PCI contributors. However, the current inferred asset allocation is available on the PCI page.
What is included in the 'Other' classification?
The 'Other' category includes allocations to property, commodities, gold and hedge funds. The specific allocation details are proprietary and disclosed only to PCI member investment managers.
Can I obtain historical estimates?
No. Since estimates represent our "best guess," they are replaced by actual published figures as soon as these become available.
How accurate are your estimates?
Estimates provide insight into expected average performance among Discretionary Managers rather than precise predictions. Accuracy is influenced by factors such as the underlying volatility of constituents and individual investment decisions made by managers. ARC continually refines its methodology to improve estimate accuracy.
How do you account for end of month volatility?
If there has been a big market movement on the last day of the month, we may need to take account of this as not all firms will capture the move in their month-end figures. For example, a manager that invests mainly through funds might take their fund prices at midday, thus missing any swings that happen in the afternoon. We have a different algorithm that smooths the price over the last two days of the month that we can implement in these situations. We also apply a qualitative overlay to the results and may choose to manually intervene in the outcome.
Commercial use of the ARC Wealth Indices requires a licence.
The usage of our Indices is detailed in clause 5 of our Terms and Conditions.
Unauthorised use of the ARC Indices incurs a penalty as set out in the terms and conditions. If there is any doubt over whether your use of our Indices is in breach of the terms, please contact us to avoid any risk of becoming liable to a penalty.