Asset Management

The choice and adherence to our long-term investment policy and asset allocation is the core driver of portfolio returns, and therefore risk. Choosing the right mix, over the right time and for the right risk appetite is the best means to deliver expected returns.

We believe that owning a well-diversified portfolio is critical to long-term portfolio success. It’s a method of taking an element of control over market changes that are essentially uncontrollable, such as natural disasters, wars and political changes.

These include the effects of inflation on purchasing power, the cost of tax and the significant ‘all-in’ cost of investing (e.g. ongoing charges and turnover costs). Controlling costs within the fund has significant benefits, especially given the multiplying effects over the lifetime of an investment.

The emotional impacts of regret, pride, greed and panic tend to result in trying to guess market timing and the excessive taking or avoidance of risk. Poor investment behaviour is likely to have a negative effect on investment returns. We take the emotion out and base decisions on quantitative analysis rather than making behavioural choices.

The purpose of rebalancing is to control risk, and to ensure that investors are not exposed to more risk than they agreed. Rebalancing can be achieved either by buying and selling funds, or by directing new money into the right asset to achieve the original balance.

We rebalance all our portfolios periodically.