The philosophy behind how we invest isn’t very exciting. That’s a good thing, by the way.
The starting point of any rational investment strategy is to know the risk profile of the client on whose behalf the investment is being made. How we do this is covered in detail in another section.
The job then is to create an investment portfolio that can be matched effectively to a client’s willingness and ability to take risk.
Our experience with literally thousands of clients has revealed the existence of a discrete range of investor archetypes which has allowed us to create a set of model portfolios that fit the bill for most kinds of clients.
All of the model portfolios we construct are based on strategic asset allocations designed to align the proportions of clients’ investments held in different asset classes with the client’s own risk profile and long-term aspirations.
One or other of such model portfolios are likely to meet the needs of a majority of clients, but more bespoke specialist solutions are available when required.
The general rules we follow are straightforward. We believe in rational investment which means if an asset does not provide sufficient expected reward compared to the risk, or the risk cannot be assessed then we will not invest.
The investment committee will only consider investments which have a positive track record, usually longer than 18 months. Equally, we seek diversity of holdings as a way to minimise the risk caused by unsystematic shocks.
Overall, our investment process is robust, transparent and easy to understand. We will assess investments by using information from fund management groups, prospectus and other relevant material as well as discussions with the management team.
Finally, the costs of investment should be known and considered reasonable for the type of investment. Investment results will always be assessed after costs are taken into account. So, not an exciting story to tell. But, of course, as an Enhance™ investor, thinking always of the long term, drama is the last thing you’ll be looking for.