Risk controls

Holding uncorrelated asset classes helps to moderate portfolio risk, and although we may reduce the weighting to an asset class whose prospects we do not like, we are likely to maintain some exposure in order to preserve diversification.

We have set a strategic range for each of the main asset classes in our seven risk adjusted mandates, so investors and advisers know in advance the exposure limits to any given asset class across all the mandates. Our tactical positioning can fall anywhere within the strategic ranges, but not outside, which means we reduce the risk of portfolios becoming too concentrated. Only if we foresaw extreme circumstances for an asset class would we take a mandate outside its strategic ranges.

All the holdings in our portfolios are monitored, and any relevant market news or unexpected movements in price are highlighted. Our aim is to reduce risk in the portfolios wherever we can while still aiming to achieve their investment objectives.

We aim to identify funds likely to outperform their peers and provide long-term, consistent performance. Our fund research team have designed a sophisticated proprietary blending tool to optimise the selection and weighting of the funds. Each risk mandate does not use a pro-rata replica of the same fund weightings, rather the risk level of the blend of funds is targeted for the specific mandate.

We monitor our investment process to ensure that clients’ money is invested as they expect it to be and that appropriate safeguards are in place, in accordance with the requirements of our regulator, the Financial Conduct Authority.