Here at Informed Choice, we run a series of three core model investment portfolios.
Whilst these are not suitable for all of our clients, they form a starting point for creating bespoke portfolios to meet individual investment objectives.
Our model portfolios are also a good way to monitor our performance and understand the impact of the tactical adjustments we make to asset allocations each quarter, as part of our Investment Committee process.
We benchmark each of our model portfolios against the FE Adviser Fund Index.
This is made up of the recommended portfolios of a panel of leading UK financial advisers. By benchmarking our performance against our peers, we get a good understanding of the value added by our investment advice process.
Last year was particularly tough for investment portfolios, with plenty of volatility throughout the year and generally disappointing returns for equity investors.
The audited returns of our model portfolios were produced today by the excellent team at The Timebank and make for pleasing reading.
Our Cautious Model Portfolio returned +4.49% last year compared to -1.23% for the FE Adviser Fund Index Cautious Portfolio benchmark.
In the final quarter of 2011, our Cautious Portfolio returned +5.22% compared to +3.46% for the benchmark.
Our Moderate Model Portfolio returned +1.10% in 2011 against a benchmark return of -4.35% for the FE Adviser Fund Index Balanced Portfolio. In Q4 2011, we achieved +5.79% compared to +4.10%.
Our Aggressive Model Portfolio returned -3.16% compared to -10.29% for the FE Adviser Fund Index Aggressive Portfolio in 2011, and +6.55% compared to +4.07% in Q4 2011.
In all cases, our model portfolios took less risk (as measured by volatility) than the benchmarks to achieve these improved returns. All figures are net of charges and have been calculated to 30th December 2011.
Whilst performance is not the only factor to consider when comparing investment portfolios, it is pleasing to see that our investment philosophy and advice process continue to deliver the expected results for our clients.
We place a great deal of emphasis on linking investment objectives to risk profiles before focusing on the strategic asset allocation required to achieve desired results.
Our tactical asset allocation decisions and fund selection process are then designed to add additional value to portfolios, rather than form the basis of returns.
Based on these latest figures, we are confident that this investment proposition can deliver to our clients a compelling reason to seek advice from Informed Choice.
Please note that past performance is no guarantee of future investment returns. The value of investments can go down as well as up.
Photo credit: Flickr/andercismo
