What sets us apart from other financial advisers is that we take into account what happened yesterday, but we are far more interested in what might happen tomorrow. We buy into opportunities, make sure we’re not overexposed to what’s expensive, and we do everything we can to uncover possibilities that aren’t regularly found by other investors or advisers.
We don’t believe in managed funds or trackers. Most financial advisers use package managed funds, or portfolios that are built from an asset allocation (that they didn’t build themselves).
Voice of experience
Here at Applewood Independent Ltd, we have the experience and the confidence to speak to fund managers. We want to hear their updates and what they think will happen tomorrow, but we’re also really interested in how they can help us diversify. It’s good to meet fund managers with contrarian views because then we have information and professional opinion. It is up to us to make the choice in terms of what is right for our clients.
Discernment of funds
Every fund manager wants tens of millions of pounds, or more than that, from every adviser so that they can top up their fund which means that discernment is vital. They share their opinion and we make up our own minds.
Having the experience to formulate our own opinions is vital because every fund manager out there will have a story that makes their fund look good – after all, they are offering a product – but we still have to cut through to what’s right for us and for our clients.
Ethical isn’t the future of investing
Fund managers are very eager to talk to us about their environmental, social and governance (ESG) funds, and these are becoming increasingly fashionable. They will always be a part of what a portfolio should be, and will be a bigger part now than in the past. We have entertained these funds: they are popular and are likely to make money in the long term. However, in our opinion, ethical funds are not the future of investing. You can read more about Applewood’s take on ESG funds in our previous blog.
We might hear from fund managers that one fund is outperforming the others, and is closely followed by a second and a third from competing fund managers. Through meeting the fund managers, it becomes apparent that all three of these funds are doing the same thing; we won’t be interested in carrying all of them because there is too much commonality and it impacts our diversity, which as you may already know from reading our past blogs, is absolutely critical to the success of a portfolio.
There is a particular manager of a multicap fund we see regularly; he generally does things differently to the other UK fund managers. In 2020, there were 570 funds in his sector, and from January through to December he was number one.
We’ve carried him for some years now; we could have chosen from any fund, and we chose the one that was number one last year (sometimes we choose not to invest through the managers we meet).
Our experience and expertise at Applewood Independent Ltd helps us to tap into the knowledge of fund managers and make the best decisions for our clients.
When you go to horse races, you might pick the horse with the blue, yellow or pink ribbon, or the one with the smallest jockey, but you never know which one will come over the line first. The horse that won the last ten races in a row might not be the one to win the race today.
Here at Applewood Independent Ltd we get it right a lot more than we get it wrong.
It isn’t possible to be 100% accurate on fund management (or horse racing!), but if you’re consistently making more money than the average managed fund, then you must be doing something right. Our unique relationships with fund managers support us to gain valuable insight into what’s performing well and what is not, and in turn, to make the right decisions to help grow your investment.
I’d love to hear your comments or questions. To find out more, feel free to get in touch by emailing firstname.lastname@example.org.
The views expressed in this article are those of the author and do not constitute financial advice. Applewood Independent Ltd is authorised and regulated by the Financial Conduct Authority. For financial advice designed for you and your specific circumstances, please contact the author using the contact details provided in this article or, alternatively, contact the Applewood Independent Ltd office on 01270 626555.
The value of your investment can go down as well as up, and you may not get back the full amount invested.
Past performance is not a guide to future performance.