Asset Classes we use
This includes bonds and gilt-edged securities, such as those issued by the British Government. Gilts offer a good diversification from equities, although returns are generally more modest. Corporate bonds (issued by companies) are considered slightly riskier than gilts but, they offer the potential for greater return and furthermore, they are negatively correlated with equities.
UK Equities have historically provided high returns over the medium to long term. However equities are quite volatile over short periods and a lack of certainty over future price movements makes them a riskier investment than some other asset classes.
Presenting a more diversified portfolio than UK based equities. Exposure to the world`s largest economy can offer the prospect of higher returns, but with a higher level of risk, as these funds are subject to the movements in currency exchange rates. This can lead to above average short-term price fluctuations.
Not totally correlated to UK markets and therefore, providing further diversification within your portfolio. Exposure to some of the smaller, emerging markets can offer the prospect of enhanced returns but, once again, with a higher level of risk than UK equities. They are also affected by movements in currency exchange rates.
The opportunity for exposure to emerging markets which, historically, have experienced dramatic price movements and rapid growth These economies provide potential for higher returns but, there is a corresponding level of risk and the presence of short-term price volatility.
The funds in this sector can invest in areas not currently covered within the asset allocation model and provide further potential for higher returns, although more volatility. These funds may include emerging economies and investment into specific commodities, such as oil and other natural resources.
Historically, property funds have enjoyed relatively low volatility and positive, stable returns. They also provide a good diversification away from equities and can contribute to the foundation of many portfolios.
There is no guarantee regarding how any of these asset classes will perform in the future. You should retain some liquid funds in a deposit account, which may also be held within your portfolio.
We can now move on, to explain how we expose your portfolio to the benefits of Asset Allocation and how we set the best possible risk and return balance to match you personal requirements.
The value of investments and the income from them can fall as well as rise and past performance is not a guide to future performance. You may get back less than you invested as investment returns are not guaranteed.