Case study 4: Invest4fun.com
Case study 4: Invest4fun.com and use of past performance information
The example promotion included in this case study is not meant to be copied as an example of good practice. Indeed, it may contain defects.
Background
The example promotion in this case study has been placed in the tabloid press. It is advertising the Holiday Fund unit trust which invests in the travel and leisure sectors. Launched in 2000, it has grown to £85 million in size and encourages consumers to take more holidays in order to boost the fund's performance!
Past performance disclosure
The past performance rules require that past performance data includes at least five years' worth of information (to stop cherry-picking only the best years). They require a past performance risk warning to be included and specify that past performance data must not be the most prominent aspect of the promotion. Past performance is not a guarantee of future returns and should not be the focal point of a promotion.
However, the new rules do provide some flexibility on the presentation of past performance information. Further, there is guidance (in COBS 4.6.4G and COBS 4.6.5G) showing one possible format for the data, using a table that would give firms a 'safe harbour'.
In this case Invest4Fun has followed the guidance and used the tabular method of disclosure. So, Invest4Fun knows that it has met the requirements for past performance.
For more information on past performance, please see the Q&A on past performance.