By DOMINIC CUMMINGS 10/11/2006
Keeping tabs on funds and their managers is no easy task. We have recorded over 130 fund manager moves this year to date, not uncommon, and experience suggests the average manager moves every 3-4 years.
| "The Credit Suisse Income fund is a good example of just how farcical manager changes can become..." |
The Credit Suisse Income fund is a good example of just how farcical manager changes can become: Bill Mott, who started managing the fund in 1986, handed over the reigns to a team including Dominic Wallington in 1996. Wallington subsequently resigned in 2000 and Mott stepped back into the fold before passing the fund to Leigh Harrison in 2003. Harrison was poached by Threadneedle in late 2005 and replaced by newcomer Errol Francis, who proclaimed he wanted to run the fund for years to come. However, Francis recently resigned and Mott leads the fund once again, despite announcing his retirement just a week earlier. Credit Suisse is believed to be recruiting a new manager so Mott can finally hang up his management boots.
Of course, not all funds experience as high a manager turnover as this example and sometimes change can be good. The key is to monitor your portfolio rigourously and make a balanced decision whenever a manager change affects one of your funds.
You should also keep a close eye on asset allocation, i.e. how your portfolio is split between different types of investment. A diverse portfolio is good as it can help reduce overall risk, but careful attention is needed to ensure the mix of assets is appropriate to your objectives and the level of risk you are comfortable taking. Bear in mind each investment will perform differently, so a balanced portfolio today could look very different in a year’s time. Periodically re-balancing your portfolio not only keeps excessive risk at bay but can also enhance returns, as the example shows:
| Asset |
Year 1 |
Year 2 |
Cumulative |
| A |
+20.00% |
-10.00% |
+8.00% |
| B |
-10.00% |
+20.00 |
+8.00% |
|
50/50 Portfolio |
| without re-balancing |
+5.00% |
+2.86% |
+8.00% |
| with re-balancing |
+5.00% |
+5.00% |
+10.25% |
History suggests that if you do not regularly re-balance your portfolio the market may well do it for you!
If all this seems like hard work then our new managed fund portfolio service, available for portfolios of £100,000 and above, could be just what you need. Upon agreeing an investment strategy that suits your needs, one of our skilled investment managers will take responsibility for managing your portfolio. Delegating all the day to day monitoring and resulting investment decisions to them will free up your time to spend on more enjoyable activities. You can also rest assured that your investment manager will be working hard to keep your portfolio in a tip-top state of health.
| "We simply charge 1% of your portfolio value per annum and rebate all commissions." |
Our managed fund portfolio service uses either the Cofunds or FundsNetwork fund supermarket platforms, giving our managers a choice of over 900 funds. Unlike some portfolio managers we don’t levy an initial charge for our services, so our financial motivation is firmly aligned with yours. We simply charge 1% of your portfolio value per annum and rebate all commissions (i.e. initial and trail) to minimise your overall cost. We receive no remuneration for making changes to your portfolio, so our only incentive for doing so is to optimise performance.
To find out more about this, and our other portfolio services, please call us on 020 7189 9900.
Please Note: Although we tailor portfolios to your risk profile we cannot eliminate risk entirely and, as with all such investments, the value can fall as well as rise.