Our centralised investment process allows us to create diversified investment portfolios with varying risk profiles. It is designed to ensure that each client’s investment portfolio is able to leverage the broad and varied expertise of our asset allocation committee, investment committee and specialist sector research teams.
Asset allocation
Asset allocation involves the distribution of capital to various asset classes (such as stocks and bonds) and geographies. It is based on the principle that the values of different assets react in different ways to changes in economic and market conditions.
In setting our asset allocation strategy, our asset allocation committee evaluates investment research to make short-term (tactical) and longer-term (strategic) assessments of prevailing global economic and financial conditions. The committee quantifies its assessments and communicates its strategy through a number of ‘guidance portfolios’, each pertaining to a certain risk profile and consisting of recommended allocations to various asset classes. The committee meets at least monthly to adjust its strategy.
Security selection
Our investment managers are organised into sector research teams, each of which specialises in a particular area of the market. This structure allows them to pool their knowledge and experience, and ensures that the managers of client portfolios are at the centre of our research process.
It is the responsibility of each sector research team to produce a buy list of recommended investments pertaining to their area of specialism. When combined, these lists form a central buy list consisting of a range of different types of investments. The investment cases of all buy list investments are reviewed regularly.
Constructing and managing portfolios
During the portfolio construction process, our investment managers create fully bespoke portfolios in line with each client’s individual investment profile. They select investments from our central buy list and ensure that each portfolio abides by our asset allocation committee’s guidance. Following the initial construction phase, each portfolio is constantly monitored and adjusted as necessary.
Supervision and controls
Our investment committee oversees our investment process, approving all asset allocation and sector buy list decisions.
It has also established a number of risk controls that our investment managers must abide with in the construction of client portfolios; these pertain to factors such as portfolio volatility.
We have implemented a sophisticated risk management and portfolio monitoring system to ensure that client portfolios are invested in line with client portfolio guidelines and our internal risk controls.