While paying your hard-earned money into your ISA or pension and buying your first investments can often feel like the difficult part, when it comes to successful investing this is only half the job. It is also important to review your portfolio regularly. In this article we look at two of the most important areas – asset allocation and the quality of your funds.
Reviewing your asset allocation
Your asset allocation is the combination of shares, bonds, property and other types of investments in your portfolio. This will influence the amount of risk you are taking, and your potential returns. A portfolio that mainly consists of equities will be riskier but potentially give a higher return than one that is mostly invested in bonds. Academic studies have suggested that asset allocation can account for up to 90% of the difference in investment returns*.
If you haven’t checked your asset allocation recently, you may find that you are taking much more (or less) risk than you would like.
It is important to review your asset allocation, because it is likely to drift over time as certain investments perform better or worse than others. If you haven’t checked it recently, you may find that you are taking much more (or less) risk than you would like. You might not be getting the returns you had hoped for either. When this happens, your portfolio must be rebalanced – this involves buying or selling specific investments to bring it back in line.
Ensure you are invested in high-quality funds
The performance of your funds will change over time, and so too could their investment styles and management teams. Your funds should be reviewed regularly to ensure that your money continues to work hard for you, and in line with your expectations. You may find that changes are needed.
Almost two thirds of fund managers perform less well than the wider market regularly**.
However, picking new funds isn’t easy. There are 3,000 to choose from in the UK alone, and almost two thirds of fund managers underperform the wider market regularly**.
Expert help with your investments
If you would rather not go it alone when it comes to choosing investments have you considered having your investments managed? Our investment experts will begin by recommending a personalised portfolio suited to your goals and requirements.
We optimise our asset models using powerful statistical and mathematical techniques, and then apply tactical changes as opportunities or risks present themselves.
Your portfolio’s asset allocation will be based on one of our Central Investment Team’s strategic long-term asset models. We optimise these asset models using powerful statistical and mathematical techniques, and then apply tactical changes to them as opportunities or risks present themselves.
Your investment manager will monitor your portfolio, making sure that its asset allocation continues to reflect the asset model and remains suitable for your individual circumstances.
Our Fund Selection Committee maintains a concentrated set of funds which we believe are the most likely to deliver for investors.
Our experts will also ensure that your portfolio is always populated with high-quality investments that we have high conviction in. If our view on a fund you hold changes, we can make sure your portfolio is updated to reflect this. At Tilney our Fund Selection Committee maintains a concentrated set of funds which we believe are the most likely to deliver for investors. When reviewing these funds we analyse performance data to ensure that a manager’s success has come from skill rather than luck, and we also look at the people, process and philosophy behind each fund.
Find out more
Please get in touch if you would like more information about our investment management service. Call us on 020 7189 2400 or email email@example.com.
For more information on the investment philosophy and processes behind our investment services, download our guide to how we manage money.
This article was previously published on Tilney prior to the launch of Evelyn Partners.