View more on these topics

Wise guises

We have long espoused the benefits of asset allocation, not on rigid ideological grounds but rather from a pragmatic standpoint. Our experience is that if you can add value, you should. Yes, it is difficult and does not always work in your favour but it has enhanced our returns for seven out of the past eight years.

We do not see it just as a case of deciding on the most appropriate split between asset classes, nor is it a case of looking at an atlas and deciding on which countries might do well this year. We view it as a function of opportunity cost and risk aversion. We want to make sure clients’ money is exposed to the best money-making ideas we can find, subject to a given set of risk constraints. We also want to minimise the chances of losing money.

There are various ways to do this. Having the best quality fund managers is crucial because, in the long run, you can be confident your clients’ money is in safe hands but there are other ways to maximise returns. Great fund managers may be expected to beat their benchmarks consistently but that does not mean they will be the best performers in all conditions. The core of our portfolios is centred on quality names but we also select managers on the basis of how well suited their style or area of expertise is to market conditions.

We have to make a decision on market conditions and then look at the best managers to fit that view. This is not purely an asset allocation call. Ultimately, whatever view we take, we need the right manager for the job. Some decisions make themselves. For the past three years or so, being overweight in equities has been the most appropriate strategy. Geographical or style biases require considerable deliberation but there are some excellent managers who can help make such decisions easier. In a market such as Latin America, there are a lot of interesting value plays. A fund such as Findlay Park Latin America is an ideal vehicle to access that where, prior to its launch last year, no such opportunity existed, in our opinion.

We also find the asset allocation process helps us take a step back from the daily noise of financial markets. Often, the key to making correct calls lies in identifying the areas of the market that everybody is not talking about. This is the basis for contrarian investing.

If we only ever held decent fund managers capable of beating their benchmarks most of the time, without making asset allocation calls, we would be content with returns that were slightly ahead of our benchmark. This, to us, signals lack of ambition. Relative risk reduction has not helped the pension industry so it is hard to see why it should be a recipe for success in the fund of funds business.

John Chatfeild-Roberts is head of the Jupiter Independent Funds Team.


LibDems call for new property levy

The LibDems are examining proposals for an annual 1 per cent levy on residences over £1m to pay for tax cuts for the less well-off.Speaking at the party’s spring conference in Harrogate, Shadow Chancellor Vince Cable said the move would be aimed at the “super rich” who he believes do not pay there fair share […]

Greenshields to be Standard non-exec

Standard Life has appointed former Barclays Wealth Management managing director Ray Greenshields as a non-executive director.

Feeling the heat

The Bonham hotel in Edinburgh and Artemis Investment Management jointly hosted a Corporate Cook-Off in aid of local charity Edinburgh Cyrenians’ Good Food in Tackling Homelessness programme.Teams from Artemis, Martin Currie and Dickson Minto battled it out in the kitchens of the Bonham under the watchful eyes of the head chef and his assistants.Sixty-five servings […]

SocGen sets up ethical structured energy fund

Societe Generale is launching a new energy protected fund which is believed to be the first ethical structured product in the market.It offers access to the World Alternative Energy index and has a six-year term.The product is under the management of subsidiary Lyxor Asset Management and features 100 per cent capital return at maturity while […]

Creating opportunity out of change

By Denise Wond, marketing manager The buy-to-let market has recently been the subject of a raft of tax changes, all of which make it a less profitable and less appealing proposition for investors. In response, we’ve seen a dip in demand for BTL mortgages and that’s bad news for many advisers who will now be looking […]


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