Fund Selection

The final stage in the process is to select investment managers that will adhere to points three and four in this process.

We will therefore draw on our experience and select the most appropriate investment managers from the whole of the market with consideration given to individual fund management philosophy as well as sector and market diversification, costs, management team experience & background, volatility compared with benchmarks, past performance and external fund rankings.

We generally employ both passive (index trackers) and active fund managers. Passive investments offer a very cost effective method of investing. However, it is important that the asset allocation is actively managed in order to try and maximize opportunities and returns.

The majority of actively managed funds are glorified closet trackers but with significantly higher management charges, and are largely driven by the fund managers desire to be average rather than do what he or she is paid for and take calculated risks to generate above average returns. This is to the detriment of the UK retail investor who is largely burdened by underperforming funds.

However, we do feel that a small percentage of fund managers can make a difference and therefore are happy to recommend these funds provided they are actively managed and closely monitored.