Building a portfolio to match a client’s risk and return appetite follows on seamlessly from the wealth and financial planning done by our client partners and wealth planners. Empirical research, and experience, shows that that the correct mix of bonds, equities and alternatives is the main determinant of returns over both the short and medium term. We generate expected returns for all asset classes using a process developed by our CIO over 20 years in the industry. Building on his experience in one of the best strategy teams in London, this is complemented by the collegiate wisdom investment team at Artorius.
One of the principles is to invest globally. This is because of the global opportunity set and diversifies a client’s exposure away from any particular country. Historically, most investors have a domestic bias which has led to lower overall returns, for example, UK investors have tended have too much exposure to UK equities, rather than holding US and Emerging Market equities. Thus, by holding global equity exposure, when the UK has an economic or political shock, we tend to find that our clients have benefited from higher returns than our competitors. We strive to avoid unnecessary complexity, so avoid hedge funds unless there are specific economic or timely investment reasons.
We test each solution designed against a range of scenarios to understand the behaviour of the portfolio to arrive at robust and resilient portfolios aimed to meet clients’ risk and return requirements.