Selecting Investments

It is important to remember that all investments carry a level of risk; generally, the higher the risk, the higher the potential return.

Depending on your fund’s performance, you could get back less than you put in. However, by receiving trusted independent financial advice from our team of experts, you can be confident that the choices that you make are right for you. Your funds will be placed into investments which suit your attitude to risk, capacity for loss and offer the potential for growth in line with your objectives.

Our Approach to Investments

We use a range of portfolios with varying levels of risk to suit our client’s needs. Each portfolio consists of five multi-asset funds. That means you get the right level of diversification and professional management for your needs, without needing a hands-on approach.

Top-Down Asset Allocation

The top-down approach is taken by most professional investors. It begins with an overall look at the objectives for the portfolio and deciding what mix of investments (i.e. Bonds, Equities) is required to meet the objectives within the risk tolerance. When this framework has been determined, individual funds are considered. We take a broad view of global markets and industries, reviewing trends before digging deeper assessing individual fund managers.

Passive vs Active

When considering investments, you‘ll come across the terms ‘passive’ and ‘active’ to describe funds. Passive funds track a market index, such as the FTSE 100, or a market segment rather than specific companies. They usually offer a lower fund charge. Active Funds make use of fund managers, analysts and researchers to pick and choose which assets to buy and sell, and when is the best time to do so. They aim to out perform benchmarks and therefore carry a higher cost.

The portfolios we use for our clients take a blended approach. They combine both passive and active funds to benefit from long-term, lowcost and diversified growth, as well as active management during times of market uncertainty and instability.

Understanding the Benchmark

Your independent financial adviser will send you a copy of our portfolio fact sheets. These outline the make-up of assets, along with the fund’s past performance against the benchmark. It is important to remember that past performance should not be used to predict the future. As with all investments, growth cannot be guaranteed. However, the benchmark will show you how a portfolio compares to the average performance of other funds within the same risk profile.

The benchmark can be used to evaluate how the different asset groups which make up our portfolios have performed and when it maybe appropriate to make fund changes.