Principles of portfolio construction
We adopt a core and satellite approach that involves outsourcing the "Core" investment strategy while allowing for a number of satellite investments that can be chosen to tailor the portfolio to your individual requirements.
Our Core Holdings are managed multi-asset portfolios whether through Fund of Funds, Discretionary Managed Model Portfolios or Full Discretionary Management. These Core investments will themselves already follow a strategic and tactical approach. Our satellite holdings are held for different reasons and tend to be investments into specific areas the investor may want extra exposure to, for example:
- Into investments such as Structured Products that cannot easily be fit into Asset Allocation models,
- Assets to take advantage of a specific opportunity or
- Some riskier or safer Assets in order to finely tune the overall risk of the portfolio to the investor’s specific requirements.
We construct our Core Portfolios by blending Managed Multi-Asset Fund of Funds to the investor’s specific Risk Profile using proprietary software developed in house. This allows advisers to construct a diversified portfolio with the appropriate mix of Growth and Defensive Assets as well as an anticipated Volatility within set tolerances and a corresponding expected Annual Return.
Satellite holdings tend to be selected on an ad-hoc basis as opportunities present themselves either through market sentiment, economic conditions or specific product releases, especially in the case of Structured Products. Due to the nature of the Core Holdings, it is not always necessary to utilise the Satellite allocation to its full extent and for many clients it may be surplus to requirements.
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