Defensive Portfolio

To provide an enhanced real return with low volatility through exposure to a broad range of asset classes.

Performance

The Defensive Portfolio returned +1.1% in October. The total return of the portfolio since inception (31st December 2012) to 31st October 2017, is +34.5%, annualising at +6.3% per annum.

Investment Objective and Approach

The objective of the Real Return Portfolio, over the medium term, is to achieve a return above inflation through a combination of income and capital growth, coupled with low volatility. Fixed income investments are the main asset class.

The Portfolio will invest in 25 or so ETFs or other collective funds, which provides a high degree of flexibility to allow the manager to implement any tactical view. The managers’ approach is to provide their own tactical overlay and therefore in most cases passive instruments are used to minimise cost. However active managers are considered for each sector and used in a minority of cases where it is felt justified.

The firm’s investment philosophy advocates complementing a core of traditional assets with exposure to value stocks, smaller companies and emerging market debt. Within equities a global approach is taken with only a moderate UK bias. For alternative investments, lowly correlated, liquid funds are used. There is an absolute focus on risk management, to control volatility, minimise draw-downs and enable maximisation of risk adjusted returns.

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