The Smart Choice

A lot has happened since the Smart Funds range was launched just over a year ago. But between the Ukraine War and the political upheavals at both 10 and 11 Downing Street, the Funds, part of our Ready-Made Portfolio (RMP) offering, have had a formidable year.

As of the end of January 2023 – the first time we have been able to report their figures – our five Smart funds have strongly outperformed their competition bolstering investor portfolios.

What is a Ready-made Portfolio (RMP)?

Our Ready-made Portfolios are built from a range of investments selected by our expert teams at parent firm Evelyn Partners, who look after over £50 billion of people’s money. These ’off-the-shelf’- style portfolios come with a carefully selected collection of investments, so you don’t have to spend time choosing them yourself.

Go Smart, Expert or Direct

Our RMP service is split into three ranges – Smart, Expert and Direct – all managed and administered by our Evelyn Partners team.

The Smart Funds are focused on driving strong returns for investors at minimal cost. Our managers do this by combining active asset allocation decisions – buying and selling equities, bonds or commodities when and where they see fit - with investments in low-cost passive tracker funds and Exchange Traded Products. These mirror the performance of a stock market index like the FTSE 100 or specific sectors, assets or themes such as US e-commerce firms.

Alongside the Smart range we have the Expert range where our managers select best-in-class actively managed funds. This is where managers put their money where their mouth is by picking and choosing stocks and bonds they believe are going to perform well.

Finally, the Direct range invests primarily directly into individual shares and bonds selected by our in-house specialists.

Our Smart range outperforms

Our Smart Fund range is tailored to fit your needs and risk appetite So, whether you are confident taking risks with your money to try to get bigger returns or you are more cautious, you should find one for you. Each one of our Smart funds has felt the flush of success this year, pleasingly beating the peer group as measured by the Asset Risk Consultants (ARC) Private Client Indices.

These are commonly used indices that show the average performance across a range of private client portfolios for a large number of wealth management firms, grouped by risk. See 'Performance data' below for more information.

Agile thinking

Ben Seager-Scott Head of Multi-Asset Funds at our parent company Evelyn Partners shares that the Smart Funds range of active management and passive products has helped deal with a tricky investment environment.

“We have focused on getting the medium and long-term positioning right rather than trying to aggressively trade unpredictable markets,” he states. “Limiting falls in down markets provides a better launch pad in subsequent market rallies.”

Ben and his management team have also made several strategic moves to boost performance including how they invest in both bonds and equities.

“Following the sell-off in government bonds, and with the change in market dynamics from worrying about inflation to worrying about growth, we have started to increase our government bond exposure to offer a form of mitigation against future wobbles,” he explains. “From a style point of view, our US equity exposure has partially moved away from growth stocks to towards value names. Whilst in Emerging Markets we have been using low volatility options to help us outperform a struggling market.”

A sparkling debut

“Although it’s a small time period and markets have been challenging, we are really pleased with how the Smart Funds have done in this first year,” says Ben. “They have held up well and highlighted the value we can add through our active management, whilst keeping total cost of ownership very low.”

Smart Cautious

The Smart Cautious fund, as the name suggests, is aimed at steadily growing your money by mainly investing in exchange traded products and tracker funds. Its biggest allocation is to bonds, but it also has significant exposure to shares and some investment in gold.

In the one year to 31 January period, Smart Cautious was down -1.1% in challenging markets but encouragingly outperformed the ARC Balanced Peer Group Index, which was down -3.0% over the same period (a 1.9 percentage point outperformance).

Smart Balanced

The Smart Balanced fund is up 0.1% over the year against a peer group return (ARC Balanced) of -3.0%, a healthy 3.1 percentage point outperformance. The Balanced fund invests, like the Cautious Fund, mostly in exchange traded products and tracker funds. But it has a higher exposure to shares – just over half of the portfolio – than Cautious, including more global emerging market companies. This can drive more growth but does add on slightly more risk for the investor given the age-old investor warning that shares can go down as well as up.

Smart Growth

The Smart Growth fund – again invested mainly in exchange traded products and tracker funds – is a little bolder with around two-thirds of its portfolio invested in shares. This takes advantage of the long-term growth characteristic of shares, with the commensurate increase in risk. Over the year it is down -0.1% but has outpaced the ARC Steady Growth Peer Group which was down -2.7% over the same period (for a 2.6 percentage point outperformance).

Smart Adventurous

The Smart Adventurous fund, for investors who say, ‘How high?’ rather than ‘Is there a cable car up that mountain?’, is up 1.9% and has significantly outperformed the ARC Steady Growth Peer Group, which was down -2.7% for an impressive 4.6 percentage points outperformance. It follows an adventurous strategy, with a large exposure to shares across a wide range of geographies and styles, again investing mostly via low-cost tracker funds and exchange traded products.

Smart Maximum Growth

The Smart Maximum Growth fund is up 1.8% over the year, well ahead of the ARC Equity Risk peer group, which fell -2.7%, for a healthy 4.5 percentage point outperformance. It is the most adventurous in our fund suite – think Indiana Jones in a bowler hat – and aims to deliver high growth through investing almost entirely in shares, across a wide range of geographies and styles. As with all funds in the Smart range, this exposure is primarily through low-cost tracker funds and exchange traded funds.

Ready for an RMP

RMPs are ideal for investors who are wanting to invest but are slightly unsure about how and where to start. Maybe they don’t have the time or the interest to choose and manage their own investments or just feel more comfortable handing the responsibility of looking after their money to our experts. They can also be a perfect hybrid-managed portfolio option for the more experienced DIY investor.

If you want to find out more then why not book a session with one of our coaches? Given the success of the last 12 months it could be a smart move for your finances at a difficult time.

Book a Coach

 

Important information

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this briefing. It does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.

The value of an investment, and the income from it, may go down as well as up and you may get back less than you originally invested.

Past performance is not a guide to future performance.

Performance Data

All data is net of fees. Performance data is calculated on a UK Sterling basis. Data supplied and independently assessed quarterly by Asset Risk Consultants Limited (ARC) – this exercise is undertaken to assess risk-adjusted performance of our portfolios submitted monthly, based on the proprietary ARC indicators. Data as at 31 January 2023. Source: Asset Risk Consultants PCI www.assetrisk.com

ARC Indices are based on historical information and past performance is not indicative of future performance. ARC Indices are computed using a complex calculation and the results are provided for information purposes only and are not necessarily an indicator of suitability for your specific investment or other requirements. ARC does not guarantee the performance of any investment or portfolio or the return of an investor’s capital or any specific rate of return. ARC accepts no liability for any investment decision made on the basis of the information contained in this report. You should always complete your own analysis and/or seek appropriate professional advice before entering into an agreement with any ARC Index Data Contributor. The content is the property of ARC or its licensors and is protected by copyright and other intellectual property laws. Use of the information herein is governed by strict Conditions of Use as detailed on www.assetrisk.com