Money

Finweek English Edition - - MONEY -

to one com­pany in this in­stance.

In ad­di­tion to be­ing ap­pro­pri­ately di­ver­si­fied, the NP was also struc­tured dif­fer­ently for the long term com­pared to the OP. We chose two ac­tively man­aged multi-as­set class funds man­aged by two highly rated man­agers. This en­sures that there is ac­tive man­age­ment in the port­fo­lio on an on­go­ing ba­sis. This way the client got a be­spoke ex­po­sure to growth as­sets, as well as ac­tive man­age­ment. We were also able to re­duce costs by:

In­vest­ing in cheap tracker funds where pos­si­ble.

Avoid­ing the use of f und of f unds port­fo­lios with mul­ti­ple cost lay­ers.

Choos­ing a cheaper, new gen­er­a­tion in­vest­ment plat­form.

The net re­sult has been quite sat­is­fac­tory (in ex­cess of 18% net of fees over the past year) de­spite the fact that one of the funds we had cho­sen de­liv­ered al­most no re­turn over the pe­riod. The port­fo­lio ben­e­fited hand­somely from the prop­erty and off­shore ex­po­sure ini­tially, and then the eq­uity ex­po­sure in the lat­ter months. The only change to the port­fo­lio has been to cut back on the prop­erty ex­po­sure, mak­ing use of the rel­e­vant ex­emp­tions to negate the CGT im­pli­ca­tions of af­fect­ing such a switch.

The OP may just out­per­form the port­fo­lio we have put in place for the client. We will only know this in the full­ness of time. How­ever, when it comes to struc­tur­ing port­fo­lios, the t wo main ar­eas we can inf lu­ence are as­set al­lo­ca­tion and costs. By spend­ing en­ergy and time fo­cus­ing on th­ese two el­e­ments, we can struc­ture port­fo­lios that will likely de­liver to ex­pec­ta­tion and meet their in­vest­ment ob­jec­tives over time.

Craig Gra­didge is the Di­rec­tor of In­vest­ments at Gra­didge-Mahura In­vest­ments.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.