Evidence based investing – putting financial science to work to help you invest successfully

Our investment management philosophy is supported by a well-defined proposition and a rigorously tested process known as Evidence-Based Investing.

We aim to:

  • Utilise leading industry research
  • Apply modern investment theory and practice
  • Optimise tax-efficiency
  • Adopt a systematic and considered strategy

 Unlike many practitioners, we tend to avoid ‘actively managed’ funds (where a fund manager attempts to beat the market on the basis of his or her own insights), and use instead ‘passive funds’ (which simply track the relevant financial market).  We do this for two main reasons:

  • Between 60% and 80% of all actively-managed funds generate poorer returns than the relevant Index – so we reduce the risk of underperformance by simply buying the Index, and
  • Passive funds are much less expensive than actively managed funds, your saving in cost helps boost your return.

Passive holdings are selected based on cost, tracking error and performance difference, all of which have a direct impact on expected returns relevant to the benchmark index. Additional consideration is given to the method of replication, fund size and stock lending.   We also use some funds offered by the Dimensional Investment Group as we feel that for long term holdings either growth or value funds can help boost overall portfolio returns.

Avoid speculation

The implementation of our portfolios is based on a framework of principles that bring consistency, reliability of outcome and lower cost to our clients.  Our implementation partners provide us with wholesale pricing and trading efficiency, all of which is delivered to your portfolio.

Our portfolios are constructed on the following foundations:

Markets have a history of rewarding long term investors. Companies compete for investment capital and investors compete to find the most attractive returns. Markets quickly incorporate information from this competition into security prices.

Traditional investing involves picking funds and individual shares and then timing investing with the objective of beating the market. However, there is almost no evidence supporting the concept that beating or timing the market is possible on a consistent basis.

Evidence from investors and academics concludes that risk and return are related, but some risks are worth taking and some are not. Investing in sound businesses for the long term is a risk worth taking.

An investment dimension is a market factor that explains differences in returns, demonstrates persistence through time and pervasiveness across markets and is cost-effective to capture in diversified portfolios.

Successful investing means not only diversifying and managing risks that may compromise performance but also targeting dimensions that generate higher expected returns. Asset allocation is by far the most effective way of managing risk and capturing returns.

Long-term results rely on our ability to effectively implement investment strategies in competitive markets.  Our implementation partners provide us with wholesale pricing and trading efficiency.

The key to investing successfully is to focus on the things you can control, in line with your financial needs and risk tolerance. Let investment markets work for you by taking advantage of sensible, well-diversified, low-cost portfolios backed by decades of Nobel-Prize winning empirical research and practical experience.

Socially Responsible Investing – an alternative investment approach

Increasingly we are finding clients taking more interest in where their money is invested and the actions and philosophies of the companies which make up their investment portfolios; a passive market index-based investment approach may not always be suitable for those with strong ethical investment views.

Socially Responsible Investing, also known as Environmental, Social and Governance (ESG) investing, is a subjective concept and various strategies are available. We think the best way for investors to invest according to their values is to exclude companies that cannot meet clear, independent ESG standards. That is why our Socially Responsible portfolios are designed to:

  • Help investors remove exposure to controversial/contentious activities;
  • Provide a rules-based, transparent exclusions methodology;
  • Exclude companies if they are involved with controversial business activities or conduct.

We focus on high levels of negative screening (and avoidance) and our prudent selection criteria enables us to maintain a globally diversified investment approach.  We believe that we provide diversified socially responsible portfolios at a very reasonable cost but, as expected, those costs are higher than with our passive portfolios.

However you choose to invest, do always bear in mind that all investments carry a degree of risk and the value of them may go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future performance.

Get in touch

Take your first step towards financial peace of mind and call us or fill out our quick contact form on our contact page and we will be in touch to help you get started.

020 8090 6575

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