Our DFM Service
What sets us apart is our specialism in investment trust focused portfolios. This is almost unique in the outsourced discretionary fund management (DFM) marketplace. To our knowledge, we are the only DFM in the country with a core investment proposition built around investment trusts.
Our model portfolios
We provide a core and / or satellite solution for your clients, depending on their investment objectives and needs. We offer a range of 11 model portfolios, which span the full spectrum of risk-adjusted returns, enabling us to fully accommodate your clients’ different investment objectives and profiles.
Our portfolios contain both investment trusts and exchange-traded funds (ETFs), with the former having the greater weighting because of their superior record of performance relative to unit trusts and markets.
Our offering
- Seven portfolios are categorised by Dynamic Planner Profiles 4 to 8, with the risk / reward remit increasing with the profiles.
- Five portfolios (Baron & Grant 4, 5, 6, 7, and 8) are focused on capital growth.
- Two are income-orientated with a targeted yield of more than 5%.
- We also offer four unconstrained portfolios: Positive Impact, ISA, High Yield (with a targeted yield of more than 6%) and Best Ideas.
Busting the myths of Investment Trusts
The perceived myths and misconceptions around advisers using investment trusts are outdated, as we explain below…
Lack of knowledge
People do not like change, especially when they are not clued up on alternatives. For example, if an adviser is comfortable recommending VCTs to their clients, it follows that they should be at ease recommending investment trusts.
They are too complex
The notion that investment trusts are “too complex” is just lazy. To combat this, the Association of Investment Companies (AIC) has launched a programme of study to help people strengthen their knowledge of investment companies.
They are illiquid
ETFs help to aid liquidity, dampen volatility, and lower the overall cost of the portfolios. We undertook extensive proprietary liquidity research to ensure that our portfolios were scalable and that our investment proposition could be effectively executed.
Worried about gearing and volatility
Reassuringly, gearing across the investment trust sector is very modest; around half of the investment trusts have no gearing, and average gearing across the sector is around 8%. Gearing tends to be beneficial to performance, given that markets rise over time.
Lack of availability of platforms
The platform market has come a long way and now, for the most part, embraces investment companies. According to the latest data from The Lang Cat, 24 out of the 27 platforms they analyse now offer investment trusts and ETFs.
They are too costly
The FCA issued interim measures that allow both investment trusts, and the funds / portfolios that hold them, to disaggregate their total cost figures into component parts. While we are very cost-conscious, our primary driver is to generate the best risk-adjusted returns for clients, net of all costs.
Our DFM fee
Like our investment approach, we believe in simplicity and transparency when it comes to charges. We charge a discretionary fund management (DFM) fee of 0.6%. This fee excludes the Ongoing Charge Figure (OCF) and relevant platform charges.
VAT is not payable on our DFM service. All charges are paid directly from the end clients’ portfolio value, monthly in arrears.
Our portfolios are currently available on:
AJ Bell Investcentre
M&G Wealth Platform
Aviva
7IM
Transact
Wealthtime
Nucleus
Quilter
