Our Investment Approach

HomeOur Investment Approach
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Clear, Concise and Precise:

Common Sense Investing

Evidence and experience show that:

  • Asset allocation is the biggest driver of long-term returns
  • Diversification reduces the risk for a given return target
  • High costs reduce returns
  • It is important to understand all the risk in a portfolio
  • Markets move in cycles, but the ups and downs are exaggerated by investor activity

We, therefore, offer a range of different portfolios that are low cost and well diversified, built from funds that have been rigorously screened and that take tactical decisions to manage / take advantage of medium-term market movements.

Our Philosophy

TCF Investment bases its investment approach for the MAPS portfolios on the following fundamental evidence-based investment principles:

Asset Selection

Asset allocation is by far the most important determinant of a portfolio’s risk and return.

Equities Vs Fixed Income

Equities, property, commodities etc. (real assets) have higher expected long-term returns than cash / fixed income bonds (monetary assets) and over the long-term, they offer protection from inflation.

Diversification

Academics and market professionals agree on the importance of diversification in reducing risk and increasing return consistency. We believe in having portfolios where there is diversification across and within asset classes and between underlying fund managers.

Low Cost

Academic studies and common sense agree that higher costs are often not rewarded with improved performance and so costs should be minimised wherever safe.

Tactical Asset Allocation

Markets often move in cycles where investor sentiment can exaggerate changes in economic fundamentals. We believe, therefore,  it is possible to increase performance by altering asset allocation on an occasional tactical basis.

Due Diligence

It is essential to understand every investment and how it is expected to perform, the inherent risks and how it contributes to any portfolio mix. Rigorous due diligence is required on all investments.

This leads us to conclude that using long-term asset allocation, making active (but occasional) tactical asset allocation decisions and using predominantly passive (or a select blend of active and passive) underlying funds, that have been rigorously screened is the optimum way to run portfolios.

Risk Management

TCF Investment has a robust control environment:

Investment Committee Approval

All investment instruments and all strategic and tactical asset allocation decisions are approved by the independent Investment Committee.

Strategic Asset Allocation Reviews

The strategic asset allocation is set to align with the outputs from leading adviser risk profiling tools.

Tactical Asset Allocation Reviews

The tactical asset allocation for each portfolio is reviewed at least quarterly by the Investment Committee.

Monitored Portfolios

The portfolios are monitored to ensure they remain within their asset allocation and risk budgets with a tactical review / formal re-balance at least quarterly.

Instrument Assessment

Individual instruments are assessed regarding their risk, cost and fit within each model.

Risk Limits

Risk limits are in place for asset allocation deviation, maximum underlying fund exposure and maximum allocation to fund providers in each portfolio.

FCA Regulated

TCF Investment is an FCA regulated UK domiciled Investment Manager.

Proven Record

TCF Investment has over a decade of breach free trading: our controls work.