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Advisers and wealth managers

Stock selection and risk management

Selecting stocks...

Our stock selection is the fruit of several factors. Our managers steep themselves in their markets through internal and external research, conversations, conferences, meetings with analysts, economists, industry experts and with the management of companies. We run an internal ‘knowledge management system’ (which we call Delphi, as in the oracle). Delphi stores all this information and analysis, and makes it readily available to our fund managers.

Some of our fund managers also use proprietary stock-screening systems, which narrow down the number of stocks to be examined in more detail. These screens allow our fund managers to concentrate their time, knowledge and skills on the most promising investments.

We believe that, whatever markets are doing, opportunities for above average returns are available for active managers. In practice this means that we only buy a share if we believe that it is undervalued, and not because it represents a significant proportion of the index. We are benchmark-aware, not benchmark-driven.

The result is ‘high conviction’ portfolios, constructed to meet, or even to exceed, our clients’ expectations. Our portfolios quite frequently have a ‘look and feel’ which is markedly different from those of our competitors and of the relevant benchmark index.

While managing risk...

We encourage our fund managers to pursue outperformance through active fund management. At stock, sector and overall portfolio levels, we monitor and assess risk regularly. Drawing on the daily data generated by our performance measurement team, our fund managers monitor risk each day. But they do so in the context of our policy for managing risk.

  • We have compliance and operational risk departments within our management team.
  • All our fund managers are aware of the risks in their portfolios, and work in close parallel with our Investment Committee. It meets quarterly, and as required, to evaluate risk across each of our funds.
  • Another check and balance is our Business Risk Committee. It also meets quarterly, and as required.
  • Risk is also a central concern of our chief investment officer and, ultimately, of our senior partner. Both can discuss risk with a fund manager, who may then be asked to adjust a portfolio accordingly.
  • The security of our clients’ money takes precedence over everything. So we select carefully the brokers, counterparties and trustees we use, and then we oversee these relationships thoroughly.

UK financial advisers and wealth managers

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The information contained in these pages should not be used or relied upon by private investors.