I tend to arrive later than my colleague Ben Willis in the mornings, getting into the office at 8.30am or so. This is in spite of the relative length of our commutes – mine is 15 minutes, and his is an hour. I find he has little sympathy when I complain about being delayed by roadworks. That said, I tend to be the last to leave, so between us, we have the day covered nicely.
We have an asset allocation meeting on the first Tuesday of every month, and on this particular day we spend much of the morning preparing for it. This means looking at the monthly performance of our portfolios, seeing what is going well or not so well.
There are four of us on the desk – myself, Ben, Jonathan Moyes and Amanda Toby, who has just joined to help on the stock-picking side. On this day, we are particularly focused on the largest strategy in our range, the monthly distribution fund. This is flavour of the month and we are seeing lots of interest from our clients, who are crying out for income in the face of low interest rates. Fortunately we’ve had a good 12 months – the fund blends UK and international equity income, with corporate and emerging market debt exposure. It has proved a good combination.
That said, we are now thinking about tweaking the allocation. We are contemplating taking profits in some parts of the bond portfolio, such as emerging market debt and high yield, and moving into inflation-linked, higher quality bonds. A lot of the asset allocators that we hold in high regard are increasingly warning of the dangers of inflation.
Among those we like are Sebastian Lyons of Troy Asset Management, Crispin Odey at Odey Asset Management, William Littlewood at Artemis and John Chatfeild-Roberts at Jupiter. They are all investors who have positioned their portfolios well based on their top-down views. We prefer to look at people who are managing money rather than economists. We find that we can consult 10 economists, get 10 different views and they are often only willing to tell you about the things they got right.
In terms of news sources, we use the usual range of Reuters and Bloomberg. We also like to keep up-to-speed with industry news through the trade press, finding out what key fund managers are doing and who is moving where.
We make sure we are all up-to-speed on this ahead of the meeting. We have recently started using a new system called Statpro, which enhances our attribution analysis and risk measurement. Jonathan is the expert on this and will bring stats to the meeting for us to use. In the meetings everyone takes a different asset class. This month, for my sins, I’ve got fixed interest, but we swap every month. There are areas such as property or cash that do not tend to change a great deal month to month.
The rest of the morning is spent in preparation for a meeting with 200 clients in Essex. The advisory arm of Whitechurch has taken over the client bank of a retiring adviser and along with my colleague Mark Stone we are due to give a presentation to this new group on the financial planning and discretionary management sides of Whitechurch. Gone are the days when I could turn up with a few scribbled notes, so I had to run through the presentation with the marketing team.
The clients do not necessarily go into our discretionary fund management programme: they can either have their portfolios actively managed on a fee basis, or have an advised portfolio that is reviewed annually – they would use our research lists for that. We have always believed that investment management and financial planning are two specialist disciplines, but we work very closely with that side of the business.
Later that day, we have a visit from the Old Mutual UK equity team of Ashton Bradbury and Simon Murphy. After London and Edinburgh, Bristol is fortunate in being a key location for fund managers to visit. We go up to London frequently to meet managers, but also get regularvisits in our offices.
We have a team of four now, so can see around 200 managers per year, but we have to be reasonably selective. There needs to be a good reason to see someone. We have in-house manager ratings to measure consistency, performance and other areas, so managers need to be on our radar. Ashton Bradbury is, of course, highly regarded and we were particularly interested in getting his top-down views on the UK equity market and economy. The group’s long/short UK Opportunities fund was of particular interest and we have a follow-up meeting with them next month to go into more detail.
The evenings will often be spent at events in London – I do about one a week. One of the best events recently was a private screening of Skyfall. These tend to be a good combination of various journalists and some of the media IFAs, such as Mark Dampier of Hargreaves Lansdown, and they are usually pretty jolly.
When these are not happening, I will often make the hour-long trip to see West Bromwich playing at home. I’ve got a season ticket. Being a West Brom fan is not always the most rewarding experience, but they beat Chelsea recently, so there are moments of pure happiness.