Investment Philosophy

An investment process guided by empirical data, academic research, and the practices of leading institutional investors.

An investment process guided by empirical data, academic research, and the practices of leading institutional investors.

1. Capital Markets Work

The prices of global securities reflect the expectation of millions of global market participants. The capital markets do an excellent job to process billions of pounds worth of trades between buyers and sellers, using all available information to set the price, plus utilising investor expectations about publicly traded securities.

2. Risk and Return are Related

There are two types of risk – good and bad. Risk is the premium investors pay for the expectation of a greater return. Higher exposure to the correct risk factors will lead to higher expected returns but with no guarantee to receive them.

3. Asset Allocation and Portfolio Structure Drive Portfolio Return

Assigning the correct asset allocation to your financial goals, partnered with the right underlying portfolio structure, are the two most important factors determining the level of risk and variability of return in a portfolio.

4. Consistent Out-performance Is Rare

It is extremely difficult for anyone, including headline grabbing professional fund managers, to beat the market in the long term. All too frequent economic uncertainties, plus random investment market movements, plus the rise and fall of individual companies add to the challenge.

There is a significant body of research to suggest that out-performance by most fund managers are down to luck rather than skill.

5. Costs Matter

It’s simple. The costs you pay impact an investor’s net return. Before a fund can outperform, it must first add enough value to cover its actual costs. Unfortunately, the vast majority of professional fund managers fail to add value due to, in part, their high cost. This is a strong predictor of poor fund performance.

6. Diversification is Essential

Not owning enough of one thing to make a killing, or be killed.

Diversification is the principle of spreading your investment risk around.

The investment portfolios we recommend hold the shares and bonds of the Great Companies and governments of the world.

7. Investor Behaviour is a Key Determinant of Their Long-term Outcome

All too often, investors let their emotions get the better of them with dire consequences for investment returns. A caring and empathetic financial planner will add significant value by helping clients maintain discipline approach, especially in extreme market conditions.

A pension is a long term investment, the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

Information is based on current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from taxation, are subject to change.

The value of your investment can go down as well as up, and you can get back less than you originally invested.