View more on these topics

Advisers clash on asset allocation

JS&P head of investments Andrew Wilson has slammed Hargreaves Lansdown’s Mark Dampier’s claim that asset allocation’s importance is over-stated, arguing that Dampier is fighting mathematics.

Wilson has responded to a recent column in Money Marketing, where Dampier said the importance of asset allocation has been widely overstated by academics, with time better spent choosing the best quality fund managers.

Dampier said academic studies saying 90 per cent of returns are from asset allocation are “only true if you get it right”, citing Jupiter’s John Chatfeild-Roberts’ poor returns from investments in Japan in 2006.

But Wilson says: “The Jupiter team have in the past done well with their asset-allocation decisions and this explains their returns versus their peer group. This is also true during times when they are less successful. Asset-allocation calls do indeed explain much of their returns, for better and for worse.”

He says Dampier’s preference for picking the best fund managers fights pure mathematics by ignoring the benefits of a properly diversified, optimised portfolio. He says most fund managers change jobs every three years – faster than the average market cycle – and says investors are therefore relying on past performance.

Dampier says: “With regard to the argument that fund managers change every three years, we do not follow the performance of the fund. Our job is to pick the best fund managers and follow them.”

He says he does not mind having a diversified portfolio so long as the diversifiers are all doing well but asks what if they all go wrong at the same time? He says commercial property is overpriced despite suggestions that it is an ideal diversifier.

Dampier adds: “As far as picking the right fund manager being the icing on the cake, it is probably harder to pick the right asset class than it is a fund. If picking the correct asset allocation is the most important decision, why didn’t everyone go short on Japan last year?”


Oval takes over Futurity

Insurance broker Oval has bought a second Scottish IFA firm with the acquisition of Futurity.The deal marks Oval’s first acquisition of a pure IFA company, with its previous 15 acquisitions all having insurance brokerages built into the businesses.Oval bought Scottish insurance broker and IFA firm Service Miller in October 2006.The Futurity acquisition will see the […]

Paternoster announces buy-out schemes of £300m

Defined-benefit consolidator Paternoster has announced that it has been selected by pension fund trustees as the annuity provider for schemes totalling £300 million in 2006.At 2006 year end, the total value of assets transferred to Paternoster in relation to these was £123 million. Chief executive Mark Wood says: “Since we received FSA authorisation last June […]

Base ball hits home run

Interest rates With one rise already this year and more on the way, Helen Pow reports on the market effects as base rate increases.

Artemis Global Income: Making sense of global markets

The rally in cyclical ‘value’ stocks paused for breath in February, as investors took a more cautious tone and switched their attention back to defensive areas. In this article, Jacob de Tusch-Lec, manager of the Artemis Global Income Fund, explains how he has positioned the portfolio, given the many economic, geopolitical and policy risks that […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm