Is the provision in Annex II, Part 1, Point 14 (b) applicable where a fund has sufficient history?

This is particularly relevant to multi-asset funds; it would be misleading to put these products in Category 1 (thus MRM class 6), whereas most often, they would actually fall into MRM class 2 or 3. The same requirements apply to products to which Point 14 applies as to other products in general as regards the case where there is insufficient data, where a benchmark should be used. If there is no appropriate benchmark or proxy the minimum data requirements will not be satisfied and the PRIIPs will be categorised as 1. Point 14(b) relates specifically to the case where there has been a revision (that is a material change) to the investment policy (not, that is, simply a rebalancing of asset allocations according to an existing investment policy). The portfolio composition of “life cycle funds”, for example, changes substantially over time usually becoming more defensive by switching from equity to fixed income assets. This means that not all of the return history of the fund may be representative of the fund’s current overall risk profile. Therefore, the data history requirements in Point 5 or 6 may be met, but part or all of that history may no longer be relevant for the fund due to a revision of its investment policy. In this case the actual fund data history is not used for the VEV calculation, and instead the maximum of Points 14 (a) (ii) and (iii) should be used. This would not involve a re-categorisation of the PRIIP into Category 1.