Bespoke Investment Planning
Investment Portfolios
We have a range of risk rated Investment Portfolios, operated on a two stage process of asset allocation and fund selection.
Rebalancing is necessary because, in the normal course of investments, the various funds within each Portfolio will grow at different rates (or indeed some or all of the funds may fall in value). This will alter the proportions of each fund and this will change its risk profile.
Asset Allocation
This is the process of building a diversified portfolio for the clients, in order to meet their financial objectives. Diversified means using a variety of asset classes and sometimes different geographic locations.
As different asset classes behave differently at different stages of the economic cycle – a process known as ‘uncorrelated growth' or ‘non-correlation of assets' – the effect is to smooth the ups and downs of the portfolio, and to deliver more consistent returns in the long term. In short, when Equities in the UK are up, Bond prices in America may be down, or vice versa. No one knows for certain what different markets will do at any particular day, but history shows us the long term trends.
In short, an effective combination of different asset classes can significantly reduce the risk of a portfolio without reducing its potential for growth.
Fund Selection Strategy
To increase the diversification of our client's portfolios, and to add as much expertise as possible at the lowest sensible cost, we tend to use ‘Collective' investments, such as Investment Funds and Unit Trusts in our client portfolios, which are risk rated to client's requirements and provide the asset allocation diversification.
There are literally thousands and thousands of such funds available, and it is the role of our Investment Committee to sift and select, using a variety of tools and systems, from this massive array. Of course, having a robust process and many years of experience helps!