Our Investment Process


Our carefully considered process aims to select the ideal investments for you, at the right time.


Our investment process has four stages, with the ultimate target of generating real returns well ahead of inflation. 



Our investment process builds on our principles to:

  • Secure growth in line with inflation (CPI), after our costs 

  • Generate additional prudent growth

  • Avoid permanent loss of capital

  • Invest for the long term


Stage 1:
Understanding how much risk we need to reach our inflation (CPI) plus targets


Client outcomes drive our investment process and to achieve our minimum return targets, we start by determining the strategic level of risk that we need to take over the longer term. This, in its simplest form, can be expressed as a percentage of the risk of investing in purely global shares.

The chart below compares the amount of risk we need within our services to the risk of investing in only global shares. For example, to achieve inflation plus 2%pa after all of our costs (Real2) requires approximately a third of the risk of investing in global shares, whereas, inflation plus 5%pa after of our costs (Real5) needs just over 80%.   


Stage 2:
Decide how much risk to take right now



Because our benchmarks have always risen in value it forces us to put the preservation of client wealth first. 

Therefore, every month we review whether now is the right time to take more, or less than the strategic long term level of risk, whilst always remaining within the agreed risk budget.

The main driver that guides our approach to risk is the value we see in the available investment opportunities.  If assets are expensive, or the market cycle mature, we look to take less risk and so preserve capital for better days. Conversely, when assets are cheap, typically at the early to mid-part of the market cycle we will take on more risk.

Our preferred strategy is to systematically reduce risk as the cycle matures.  Within any client’s mandate we can routinely flex risk up to ~110% and down to ~85% of the long-term risk we need to deliver their target returns.  We run above 100% in the early and mid part of the market cycle when investment returns are strong and not generally lost at the end of the cycle.  We then progressively reduce risk in the second half of the market cycle down towards ~85%. 

The output from this stage is to have a tactical risk budget for our clients portfolios.


Stage 3:
Identify the investments with the best growth potential


The next stage is to decide which asset classes we want to allocate our client’s capital towards. This requires us to understand and identify the best available opportunities around the world. To achieve this, we work with independent economists, as well as those who are closer to markets, to build a broad and balanced outlook.

As true multi-asset investors we invest across the whole investment universe as it is only by looking far beyond the bond, equity and property markets that we can outperform inflation with an acceptable level of risk. We also search for assets that are less dependent on the wider economy which helps to diversify the risks.  

Our approach is both long term and conservative. We are less interested in "blue sky" investments or companies with big claims and no profits because many of these investments can lead to a permanent loss of capital. 

Throughout the process, we try and remain unbiased and focused on uncovering the best risk adjusted real returns. For example, we are decidedly indifferent between active or passive investments and to counter the inherent biases that can arise we have purposely built an investment team with a wide range of skills and perspectives.

Our goal is to identify the most profitable themes and ideas and then determine the investments that can convert them into meaningful outcomes for our clients. 



Stage 4:
Build the Portfolio


The final part of the process is to build the portfolio. This requires careful thought about not only the potential returns from the investments identified in stage 3 but also their interaction and how they piece together.  Our aim is to construct an efficient portfolio that offers the best risk reward profile within the tactical risk budget from stage 2. 

Our aim is to balance the various risks within the portfolio and therefore our investments are both global and span across many different asset classes. 

The multi-asset nature of our approach means we cast the net wide to find individual investments and our research ranges from simpler investments, such as equity funds, to more sophisticated areas such as investment trusts, structured products and more complex funds. Regardless of the complexity, our ambition is to find the most effective way to build our clients’ portfolios.

Research has shown that, if you invest in a wide range of assets, 88% of your experience in terms of performance and the bumpiness of the journey can be explained by the asset allocation.*

*Source: Vanguard, The Global Case for Strategic Asset Allocation (Wallick et al., 2012).

Find out more


We're happy to answer any questions you may have about our investment process and whether it's a good fit for your needs.


or find out why we're different.