A holistic approach is taken to the management of capital. It combines the disciplines of financial planning with portfolio management and focuses on maintaining the optimum asset allocation within a client portfolio. In this way it shelters income from stock market volatility - particularly important in retirement or when approaching retirement..
There is insufficient room here to describe the investment philosophy and discipline in detail, but they may be summarised as follows:
- OBJECTIVES - to help define, quantify and prioritise clients' financial commitments and objectives.
- RISK - to help clients understand different types of risk and establishing their attitude to investment risk.
- FINANCIAL PLANNING - the essential starting point - estimating future cash flows - how much in today's money clients will need to draw from the portfolio - and when.
- LIABILITY MATCHING - the use of fixed interest securities to ensure that adequate cash is available for planned withdrawals from the portfolio.
- ASSET ALLOCATION - the principal determinant of a portfolio's performance is how investments are allocated among different asset classes, principally cash, bonds or equities.
- DIVERSIFICATION - using collective investments such as unit and investment trusts, the allocation of equities geographically and by market capitalisation, as well as by fund management styles.
- FUND RESEARCH - having established the optimum asset allocation, we select the fund managers we consider most competent in their specialist areas of investment.
- TOTAL RETURN - our aim is for total return, combining income and capital growth, allowing maximum investment flexibility: clients' drawings from the portfolio will comprise both.
- TIME HORIZONS - the real risk is not short-term volatility but the risk of falling short of long term financial objectives.
- MARKET TIMING - asset allocation is a strategy based on time, not timing, avoiding the unnecessary risk of being out of the market when it really matters.
- ACTIVE OR PASSIVE - whilst using both approaches to fund management, our philosophy is to minimise transaction costs, moving only when the portfolio diverges significantly from the optimum asset allocation.
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