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We offer a range of bespoke model portfolios to suit all types of investors and levels of risk. Our ISA, OEIC and SIPP model portfolios offer diversity, optional re-balancing and a robust investment strategy. The aim of our model portfolios is to out-perform while also reducing volatility through effective asset allocation.

We are happy to test how your funds have performed versus our model portfolios

It is important to remember that the value of your investment can go down as well as up and you may get back less than you have invested.

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Asset allocation

Ibbotson Associates is a leading authority on asset allocation with expertise in capital market expectations and portfolio implementation. They approach portfolio construction from the top-down through a research-based investment process which addresses all investment phases, from accumulation to retirement and the transition between the two.

Ibbotson creates the asset class models on the basis of mean-variance optimisation, a Nobel prize-winning economic theory. Optimisation looks at the expected risk and return of each asset class along with the correlation among asset classes, and determines which combination of asset classes will provide the highest expected return for any risk level.

Once the asset class models are determined and the investment options are analysed, Ibbotson determines the appropriate combination of the investment options. This finely tuned approach, which includes alpha-tracking error optimisation, incorporates a balanced core group of managers combined with select active managers to create a portfolio that is truly unique and goal specific. Ibbotson uses the customised style-specific benchmark when allocating investment options to finalise the strategic asset class models. By using alpha, tracking error, and investment styles, an optimal mix of investment options is determined and the target strategic asset allocations are implemented.

Fund selection

The asset allocations are populated by a variety of different fund types depending on what suits you best, be it actively or passively managed funds or self-rebalancing funds.

Morningstar Old Broad Street Research use an investment approach founded upon forward-looking qualitative research. They combine funds on the basis of their knowledge of the fund manager rather than solely on backward-looking statistical analysis.

They take into account things like ownership, stability, investment philosophy, investment process, personnel, research resources and risk controls. Funds are then blended so that as a group they reflect the risk profile of the portfolio in question.

Morningstar OBSR’s approach is long-term in nature, on the understanding that there will be times when individual funds experience difficult periods. Therefore they don’t make changes on the basis of short-term performance alone but will suggest altering the composition of funds if they have reason to question the ability of a fund manager to achieve their objectives in future.

Vanguard Asset Management offer a range of index tracking funds offering investors a wide spread of risk through broadly diversified exposure to equity and fixed income markets, at low cost.

Vanguard is an independent asset manager with a mutual ownership structure which combined with a focus on asset management significantly minimises conflict of interest risk and allows it to provide investors with a high service quality at a low and transparent cost. Funds are blended to a form that matches the asset allocation that suits someone with your risk profile. Replication – the equity based funds employ a strategy of full replication, meaning they will exactly match the composition of the index they are tracking.

Standard Life Investments MyFolio

The MyFolio Fund range is a family of carefully built portfolios offering active or passive investment strategies across five risk levels. All MyFolio funds offer automatic rebalancing as without it, over time, asset classes will drift from the percentages calculated to suit your attitude to risk. Unlike the OBSR and Vanguard model portfolios, MyFolio’s strategic asset allocation is reviewed and amended by Barrie & Hibbert a world leader in financial risk modelling Tactical asset allocation is carried out by the fund management team at Standard Life Investments to optimise the fund performance in certain market conditions. By doing this, the team aims to fine-tune performance by taking advantage of any market anomalies. The aim of our model portfolios is to out-perform while also seeking to reduce volatility. We have back-tested the OBSR Balanced portfolio against the Investment Association sector average over 5 and 10 years. The FTSE 100 has been plotted as well for reference purposes only as it is higher risk, being by nature wholly equity-based.

As we are independent, whole of market advisers, the above funds are a selection of some of the solutions we may use. These are subject to review and therefore may change should our research find better solutions.