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Portfolio Construction & Risk Management

We manage portfolios with reference to the structure of our internal models, which take into account different objectives and risk profiles. For those with specific investment requirements we can adopt a tailored approach with a bespoke portfolio.

Our investment managers have 5 model portfolios to refer to and each model differs in risk profile and investment objective. The models demonstrate how capital should be allocated across the asset classes of equity, fixed interest, alternative (i.e. structured products, hedge funds) and cash.

A model portfolio committee meets monthly to oversee the house view on asset allocation with managers then kept abreast of recommendations on individual investments, to include an investment meeting each morning.

The 5 model portfolios are:

  • Cautious
  • Income
  • Balanced
  • Growth
  • Adventurous

We do have the flexibility of meeting specific investment requirements and tailoring portfolios to suit through our Bespoke approach. This enables clients who wish to invest in a specific fashion – for example 100% Equity – to do so, whilst still benefiting from our investment process.

Our Cautious model is regarded as the lowest risk, rising to Adventurous at the higher risk end. The proportion of the portfolio held in direct equities tends to rise with the higher risk position adopted. The Cautious portfolio is unlikely to contain direct equity with exposure gained primarily through collective equity funds.

All of the investments on our ‘Authorised List’ are given a risk score resulting from a number of quantitative inputs. This enables us to gauge the risk of a whole portfolio and provides managers with guidelines as to what risk score is acceptable for each particular model portfolio.

Portfolio Construction & Risk Management