Maximising Returns with our Managed Portfolio Service: Strategies & Tips

We offer professional management of investment portfolios, leveraging various strategies to help achieve your clients’ financial goals. This article delves into the key strategies used by us in MPS, such as diversification, risk management, and asset allocation, and provides practical tips to optimise portfolios. Our fundamental opinion is that asset allocation is critical to the success of achieving portfolio outcomes and we therefore have active asset allocation in each and every one of our portfolios, this can then be implemented in a number of different ways be it passive or active instruments, a style bias or a focus on sustainability.

Investment Strategies in Managed Portfolio Services

1. Diversification

Diversification is a fundamental strategy, it involves spreading investments across various asset classes, sectors, and geographical regions to reduce risk. The rationale behind diversification is that different assets often react differently to market conditions. By holding a diversified portfolio, the negative performance of some investments can be offset by the positive performance of others.

Key points:

• Asset classes: Include stocks, bonds, and alternatives such as property and infrastructure as well as cash and cash alternatives.
• Sectors: Rather than investing in the overall market exposures, specific opportunities can be positioned in portfolios by Investing in different industries such as technology, healthcare, finance, and consumer goods.
• Geographical regions: Consider global investments to mitigate country-specific risks and increase the available opportunity set to achieve the defined outcomes.

2. Risk Management

Risk management is crucial in protecting the portfolio from significant losses. Managed Portfolio Services employ various techniques to manage risk, including:

Key techniques:

• Risk assessment: Regularly evaluate the risk profile of investments analysing both current future and historical market scenarios
• Hedging: Currency exposures can challenge MPS returns when adopting a global approach, we do not speculate actively with currencies but carefully manage and assess the impact of currencies in the economics of each active position in the portfolio.

3. Asset Allocation

Asset allocation involves distributing investments among different asset categories based on the investor's risk tolerance, financial goals, and investment horizon. This strategy aims to balance risk and reward by adjusting the proportion of each asset class in the portfolio.

Key considerations:

• Investment horizon: Consider the time frame for achieving financial goals and align investment decisions to this objective, a medium-term approach will align to a diversified growth portfolio, while shorter time horizons will encompass different risk profiles to be considered in the construction of portfolios.
• Financial goals: Align asset allocation with specific objectives, such as retirement planning or wealth accumulation, thus being more outcome focused and linked to inflation

Practical Tips to Optimise Portfolios

1. Regular portfolio reviews

We regularly review and rebalancing the portfolios to ensure they remain aligned with the investor's goals and risk tolerance. Market conditions can change, necessitating adjustments to the portfolio.

Action steps:

• Reviews: We have a quarterly process to assess the macro (growth / inflation / fiscal and monetary policies) process to review the bigger picture market developments focusing on an 18 month to 3-year time horizon. We then have a monthly asset allocation process focusing on a 6–18-month time horizon, looking at specific asset classes, considering not just the macro implications but the valuation and sentiment drivers looking for value in the markets.
• Rebalancing: We adjust the proportions of asset classes to maintain the desired risk level, this is not set to a formal schedule as often doing nothing is an active investment decision, we always remain conscious of the cost of execution on behalf of customers

2. Stay informed

Keeping abreast of market trends, economic indicators, and geopolitical events can help make informed decisions. With our Managed Portfolio Services, we often provide insights and updates to help you stay informed.

Action steps:

• Market analysis: Follow market reports and analyses from reputable sources such as us, our insights can be found here and you are welcome to attend our quarterly webinars.
• Economic indicators: Monitor key indicators such as inflation rates, interest rates, and employment data.

Conclusion

Maximising returns with Managed Portfolio Services requires a strategic approach that includes asset allocation, diversification, risk management, and robust approach to portfolio construction. By regularly reviewing portfolios, staying informed and leveraging technology portfolios can be optimised to achieve your clients’ financial goals. Our Managed Portfolio Services offers a structured and professional way to navigate the complexities of investment management, providing peace of mind and potential for higher returns.