The Managed Portfolio Service is our flagship investment proposition; launched in 2012 the portfolios are over five years old and have an enviable track record. The service was set up to address a key challenge which many advisory forms still struggle with namely how to deliver a consistent investment process to our clients whilst at the same time being able to tailor the risk/return characteristics of recommendations to their individual needs.
The service consists of a series of risk-targeted portfolios which blend together a mix of different asset classes (UK and Overseas Equities, Bonds, Property, Alternatives and Cash) and funds from a wide range of fund managers. The portfolios are made up mainly of actively managed funds but where it makes sense to do so, index funds are also employed. Each portfolio has defined target risk characteristics and is benchmarked against a suitable investment sector to ensure risk and return characteristics can be monitored. The mix of assets and funds in each portfolio is decided upon taking into account its intended risk/return characteristics.
Following the success of the actively invested portfolios over their first five years, in 2017 a limited range of “Index” based portfolios were introduced to provide additional investment options for our clients. These portfolios aim to replicate as closely as possible the investment process for the active portfolios but, use index tracking funds as their core investment vehicles.
The portfolios are constructed with the assistance of a third party actuarial model which aims to establish the optimum blend of assets for a given risk profile by running simulations based on assumed future rates of investment return. These models are then populated with funds from our investment panel which is a shortlist compiled from funds across the whole of the market.
Portfolios are reviewed on a quarterly basis from an asset allocation, and investment funds point of view. We will actively swap out under performing funds and seek to identify those funds which in our view offer the best prospects for future returns. As part of the quarterly review each portfolio is also measured from a risk/return point of view against the model and benchmark to ensure they continue to meet their objectives.
Following each quarterly review, all of our clients who invest in the service will receive an email advising them of any changes that we recommend. As this is a wholly advisory service, clients must reply to ensure the changes are implemented. Each quarter, regardless of whether any other changes are to be made, we recommend clients rebalance their portfolios back to the model asset/fund allocation. This process ensures the portfolio’s risk and return characteristics don’t drift over time as a result of investment performance issues.