Sifa managing director Ian Muirhead has defended Hargreaves Lansdown head of research Mark Dampier’s comments on asset allocation, claiming that advisers do not have the expertise to make any geographic calls.
Muirhead says advisers should not try to construct portfolios like fund managers as they lack the expertise to predict markets and should stay with the core/ satellite approach, with core vehicles consisting of fund of fund or multi-asset vehicles.
He believes that advisers often fall into the trap of making asset-allocation calls using the satellite approachHe says: “Following geographical trends is a recipe for disaster. What you should do for satellite options is look at equities, bonds and prop-erty individually.”
Dampier has been criticised for his comments in Money Marketing when he said asset-allocation calls only account for 90 per cent of returns if the decision is right.
Selestia and Skandia multi-funds head of investment marketing Graham Bentley branded Dampier’s comments as the “Vicky Pollard School of Asset Allerkation”.
Muirhead says: “Dampier’s comments make sense. If you look at the cult of the star fund manager, those firms which neglect that approach actually do not have the figures to match up, with Fidel-ity being the exception.”