Every Tom, Dick and Harry has had a pop at Neil (yes, the villain has a first name) Woodford over the last few days. Countless rent-a-mouths have queued up to drizzle us with their schadenfreude (most know nothing about funds). But while they like to claim they saw it coming, they conveniently forgot to warn the rest of us.
Over the last decade, a key feature of the retail investment landscape has been the industry’s development of risk-grading as a response to the suitability issue. How do advisers and their clients best ensure that the portfolio selected for them is most likely to produce the capital appreciation and income provision they expect, with the fewest surprises? In other words, what is the risk that they don’t achieve their goals? That risk has been distilled down to a single figure on a risk-scale derived from a portfolio’s expected standard deviation of returns, also known as volatility.
After a year like 2018, it's no surprise if some advisers’ minds turned to so-called safe havens. One asset class that used to fall into that classification was Property.
Gatekeepers tend to select single-strategy funds as building blocks in broader portfolios, so the presence of multi-asset funds on gatekeeper lists is usually to cater for one-stop shoppers on D2C platforms, for ISAs for example, or to satisfy the needs of smaller investments through advisers where they may be aimed (unfairly) at so-called less-sophisticated investors.
Having led the retail sales figures all year, perhaps it was no surprise that the Global sector was overtaken by a mixed asset sector in Q418. Plummeting equity values served to remind investors that stuff goes down as well as up – despite years of outstanding growth, investors took to more hand-wringing than perhaps a three-month downturn warranted. Global is the new black The attractiveness of the Global sector over the years – and the withering of the UK All Companies equivalent – reflects investors and their advisers’ increasing desire to leave decisions on geographical allocation to the manager. However, the sector...
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