Wednesday, August 17, 2022

Successful investment is critical to your future financial well-being, but it's an area which presents a unique problem, future performance is unpredictable!

As Chartered Financial Planners our core belief is that no single investment house has a monopoly on investment expertise, we have therefore developed an effective solution to this problem:

Asset Allocation Founding Beliefs

Investment Philosophy and Asset Allocation Policy

Our Investment Committee meet formally on a quarterly basis to monitor our Client Portfolios, and the Fund Managers we use with a filtering process that includes:

Examples of Fund Analysis Tools:

1. Citywire

Citywire is one of Europe's most innovative and fast growing financial information groups. Set up in 1999, Citywire has quickly established a reputation for incisive analysis of retail investment funds and equity markets.

Past performance is the first step towards successful fund selection. To find an excellent investment fund that suits the investors needs, you must look at more than just performance track records. You need to understand the people, philosophy and process used to achieve that performance now and in the future.

Citywires exclusive methodology ranks fund managers according to their individual track record, rather than the performance of the fund they currently run. Through this system fund managers are compared with their peers. The level of risk a manager takes can be considered. Also taken into account is how they perform compared with the benchmark index of the markets they invest in.

Any manager achieving a Citywire rating is considered a well above average performer. Less than one in five fund managers get any rating at all from Citywire. There are also other independent fund rating agencies that provide useful data in helping to assess the merits of investment funds. Not all funds are assessed, particularly if they have not been in existence for very long.

2. S&P Fund Stars

To assist investors evaluate the performance of a fund and the consistency of that performance relative to other funds in the sector, Standard & Poors have developed the S&P Fund Stars based on a funds relative performance.

The S&P Fund Stars are calculated using a funds monthly performance relative to its sector average for each of the 36 months over the 3 years to date. The average and volatility of these 36 numbers is used to calculate a funds star rating.

3. OBSR Ratings

OBSR Ratings are determined based not only on fund performance, but also by taking into account numerous other key factors including:

  • Strength of investment process and how long it has taken place
  • Continuity of investment personnel
  • Investment style that has proven durable over time
  • Clearly defined investment objectives
  • Strong and consistent past performance record
  • Favourable risk adjusted returns

4. Trustnet

This facility provides in depth background information into fund performance, the asset allocation within funds and relative risk.

The Investment Committee's role is to:

  • Select some of the best investment managers
  • Monitor those managers to ensure their performance is consistent
  • Change managers if this becomes necessary
  • Give clients diversification of risk by selecting managers with different styles

We strongly believe a core holding of perhaps Exchange Traded Funds (ETFs) and a passive management approach can be extremely useful, particularly for some Trusts, Charities and Pension Schemes.

Whilst of course we can't guarantee future investment performance, we offer an investment approach that is designed to maximise the goal of achieving the desired investment performance over the medium to long term.

Investments can go down as well as up, you may not get back the original capital invested.