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.