Please remember that past performance is not necessarily a guide to the future. Investments in any of the Funds mentioned in the site or Charles Stanley's range of investment products carry a degree of risk that is set out in the relevant full Prospectus. The value of your investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments.
Investment Process
Fund selection: bottom-up process
- Funds chosen according to our rigorous bottom up manager selection process
- An investment is only made after due diligence criterion have been carefully considered and requirements met; due diligence analysis covers the below and more:
- People: team history, personnel/resources, team structure (committees/number of PMs/number of analysts), remuneration/incentives (bonuses linked to absolute or relative performance compared to an index)
- Process: absolute or relative return target, bottom-up vs. top-down methodology, low/high conviction portfolio (number of holdings), well structured/methodical process (explainable and repeatable), consideration of biases introduced by filters/screens
- Performance: cumulative and discrete historical performance analysis (evaluate consistency of peer group and benchmark relative performance), risk statistics (beta, cash levels, maximum drawdowns etc.)
- Portfolio risk management: portfolio constraints/flexibility (diversification, style drift, volatility levels), risk exposures, operational risk (risk management resources)
- Funds are monitored on an ongoing basis; sell discipline based on material change to any of the above or because we have greater conviction elsewhere
Asset allocation: top-down process
- Portfolio's geographic/asset class allocation is benchmark aware, but not benchmark driven
- FTSE World ex UK Index is used as a starting point, to ensure a level of global diversification, and then we weight the portfolio to take into account our macro views
- The process:
- Macro inputs: for this we primarily draw on the extensive investment management expertise at Charles Stanley as well as directly from the Charles Stanley Select Portfolio committee, Collectives Portfolio Service committee, market news and fund manager views
- Further research carried out to quantify/evaluate macro inputs: economic lead indicators, market valuation metrics, momentum/trend indicators
- Macro output: reallocation of regional asset allocation, depending on where we see the greatest potential for financial market returns (whilst maintaining geographic diversification)
Portfolio Construction
- Risk managed at the portfolio level through diversification across geographies, asset classes, investment styles and fund managers/groups
- Funds weighted according to level of conviction or in order to balance the overall risks of the portfolio
