Asset Allocation is Attributable for 85% of Investment Performance

 

 

Asset Allocation is Attributable for 85% of Investment Performance

Should investment advisers and managers be “Active”? or should they be (they usually are!) passive by following the herd and tracking the almost static asset allocation of benchmark asset allocation, choosing to hide behind benchmark performance and volatility by matching them to within a whisker of their lives.

We would argue that to genuinely work for our clients and not simply hedge our bets to protect us as a company from under-performance against benchmark, we have to be active, nimble and bold to make the common-sense decisions to really make asset allocation work even harder for our clients.

The panacea for the investment adviser/ manager is to achieve the best investment performance return, whilst taking the minimum amount of risk possible. In other words to produce the best “risk-adjusted returns” for our clients.  This is arguably the most difficult task of an investment adviser, to achieve More Growth with Less Risk.

An even harder, arguably impossible task perhaps according to the big investment institutions who track and hide behind benchmark performance and volatility would be to measure their investment performance against arguably the most difficult benchmark to beat, – the FTSE UK Private Investor multi-asset benchmarks and then demonstrate how a Level 5 (out of 10) Balanced Risk clients’ investment portfolio over the past quarter, has out-performed the FTSE UK Private Investor Growth Risk benchmark by +33.34% with volatility (inherent aggregated risk) within the portfolio over the period being -26.32% lower than the FTSE UK Private Investor Conservative Risk benchmark over the period.

Impossible, isn’t it?  Not for us, – see below the performance of our Balanced Risk Managed Advisory Portfolio over the past Quarter.

+5.2% Growth which is +33.34% better than the FTSE UK Growth Risk Benchmark which returned +3.9% – with volatility (inherent risk)

of just 4.2 which is -26.32% lover volatility than the FTSE UK Conservative Risk Benchmark which had a volatility of 5.7

Our performance for this Balanced Risk Managed Advisory Portfolio over the past quarter:

against….

• FTSE UK Private Investor Growth Benchmark +33.34% better growth, with just 44% of the risk
• FTSE UK Private Investor Balanced Benchmark +57.58% better growth, with just 55% of the risk
• FTSE UK Private Investor Conservative Benchmark +173.42% better growth, with just 73% of the risk

 

 

We rest our case – be active – don’t follow the herd, don’t hide behind benchmarks – beat them! Find out more here.

More growth with less risk – www.private-office.co.uk