Investment Management Process


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Find out how your money can be invested for the longer term in a professionally managed portfolio that matches your risk profile.

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Investment Management Process

  1. 1. Our investment process HCL Investment Services Ltd
  2. 2. A simple and disciplined investment process
  3. 3. Asset Allocation is Key Ensuring you take on the right amount of risk
  4. 4. Market Timing <ul><li>Equities are good for the long term but the ride can be bumpy </li></ul><ul><li>It usually pays to stay in the market but remember that there are risks involved with any stockmarket investment </li></ul><ul><li>Time not timing is key to successful long-term investing </li></ul>If you had remained fully invested throughout the period, you would have achieved a strong positive return of 226%, significantly higher than the 128% return from cash. However, if you had missed the ten best days each year, you would actually have lost most of your money over the period with a return of -84%.
  5. 5. Stock market Investment <ul><li>The stockmarket can be a great place to invest if you are looking for long-term growth but remember there are risks involved </li></ul><ul><li>The longer you invest in the stockmarket, the higher the chance that you will get a strong return and the lower the chance you will lose money </li></ul><ul><li>If you can only invest for a short period, the stockmarket is generally best avoided </li></ul>
  6. 6. Inflation <ul><li>To make a real return on your money the first challenge is to beat inflation </li></ul><ul><li>Inflation can have a damaging impact on your spending power - if you don’t protect yourself against it </li></ul><ul><li>Over the long term, there is no risk you will lose money if you leave it in a saving account but you may not be protected against inflation </li></ul><ul><li>Stockmarket investments have the potential to protect you against inflation and provide a good real return but remember your capital is at risk </li></ul>
  7. 7. Asset Allocation is Key <ul><li>In determining the risk and return characteristics of a portfolio ‘asset allocation is key’ </li></ul><ul><li>But what asset allocation is the right one for you given your return needs and tolerance to risk? </li></ul>Determinants of portfolio returns – Brinson et al, 1995
  8. 8. Our Asset Allocation Consultants <ul><li>We have engaged the services of Ibbotson consultants to guide our asset allocation decisions </li></ul><ul><li>Ibbotson’s key attributes: </li></ul><ul><ul><li>Focus on Asset Allocation - managing asset allocation since foundation in 1977. </li></ul></ul><ul><ul><li>Academic Underpinnings – have a strong foundation of academic research. </li></ul></ul><ul><ul><li>Independence – they create customised innovative solutions but donot offer their </li></ul></ul><ul><ul><li>own investment products. </li></ul></ul><ul><ul><li>Experience and Expertise – over 30 years of experience and an accomplished </li></ul></ul><ul><ul><li>staff, Ibbotson is a leader in asset allocation. </li></ul></ul><ul><li>Created five key portfolios matched to your attitude to risk </li></ul><ul><li>These will be reviewed annually </li></ul>
  9. 9. Our Portfolios
  10. 10. Our Portfolios - Continued
  11. 11. Our Portfolios - Continued
  12. 12. Our Fund Selection Choosing the best funds from the entire market
  13. 13. Our Fund Selection Consultants <ul><li>We have engaged the services of Old Broad Street Research Ltd to guide our fund selection decisions </li></ul><ul><li>What Old Broad Street look for in a fund: </li></ul><ul><ul><li>Strength of investment process and length of time it has been in place </li></ul></ul><ul><ul><li>Continuity of investment personnel </li></ul></ul><ul><ul><li>Investment style that has proven durable over time </li></ul></ul><ul><ul><li>Clearly defined investment objectives </li></ul></ul><ul><ul><li>Strong and consistent past performance record </li></ul></ul><ul><ul><li>Favourable risk adjusted returns. </li></ul></ul><ul><li>Based on the asset allocation provided by Ibbotson, Old Broad Street have provided us with five model portfolios </li></ul><ul><li>These will be reviewed quarterly </li></ul>
  14. 14. Our Income Portfolio
  15. 15. Our Cautious Portfolio
  16. 16. Our Balanced Portfolio
  17. 17. Our Active Portfolio
  18. 18. Our Aggressive Portfolio
  19. 19. Our Administration System Ensuring your investments are tax and administratively efficient
  20. 20. Administering your investments – the old model
  21. 21. Our New Model – Taking Back Control for your Benefit
  22. 22. Our Investment Platform of Choice <ul><li>We have chosen the Paradigm Nucleus Wrap, an investment platform that we can influence, as our investment platform of choice </li></ul><ul><li>The Paradigm Nucleus Wrap offers you: </li></ul><ul><ul><li>Ease of transactions - one point of entry to access your portfolio and arrange transactions. </li></ul></ul><ul><ul><li>  Reduced administration – consolidated income and capital gains tax statements from one source to help simplify the tax year end reporting for tax return purposes. </li></ul></ul><ul><ul><li>  Control – as your adviser we will be able to report, arrange transactions and monitor your portfolio from one, centralised online platform. </li></ul></ul><ul><ul><li>  Enhanced choice – providing the investment and/or security are tradable it can be accessed through the wrap provider. </li></ul></ul><ul><ul><li>  Access – you will be able to access your portfolio online via our website to get an up to date valuation. </li></ul></ul><ul><ul><li>  Cost and Economies of scale - The avoidance of marketing and sales costs for the fund management groups and the purchasing power of the wrap provider equates to favourable discounts on initial and annual management charges of individual funds chosen. </li></ul></ul>
  23. 26. Other Key Elements of our Service Tax efficiency & Rebalancing
  24. 27. Other value added benefits <ul><li>We have designed other elements of our service to ensure that your portfolio remains as efficient as possible, these are all included within our fee: </li></ul><ul><ul><li>Our Rebalancing Service - as you know investments naturally grow at different rates with the more volatile investments such as equities growing differently that relatively predictable investments such as cash. Our rebalancing service ensures that your investments remain invested in the proportion that you originally intended this controls the risk and ensures that you follow that important principle of buying funds at low prices and selling when high. </li></ul></ul><ul><ul><li>Our Tax Efficiency Service – we will always ensure that your portfolio is as tax efficient as possible through the use of our: </li></ul></ul><ul><ul><ul><li>General Investment Account </li></ul></ul></ul><ul><ul><ul><li>ISA </li></ul></ul></ul><ul><ul><ul><li>Pensions </li></ul></ul></ul><ul><ul><ul><li>Bonds </li></ul></ul></ul><ul><ul><li>As part of this service we are happy to offer you our ‘bed and ISA’ service in which we transfer some of your tax yielding assets into their tax free ISA equivalent. Over time this will provide you with an income and capital gains tax free portfolio. </li></ul></ul>
  25. 28. A portfolio not rebalanced Example Only
  26. 29. A portfolio rebalanced Example Only
  27. 30. A portfolio not rebalanced Example Only
  28. 31. A portfolio rebalanced Example Only
  29. 32. Summary <ul><li>The Benefits of our service: </li></ul><ul><ul><li>An asset allocation provided by and reviewed by world class actuaries </li></ul></ul><ul><ul><li>Fund selected and reviewed by well respected fund research company </li></ul></ul><ul><ul><li>Consolidated and cost controlled administration </li></ul></ul><ul><ul><li>Review and rebalance to ensure the portfolio continues to meet your needs </li></ul></ul><ul><ul><li>Complete tax efficiency </li></ul></ul><ul><li>This presentation is for information only. You must seek advice before embarking on a course of action </li></ul>