The famous AESOP fable of the hare and the tortoise tells us the story of the hare who ridicules a slow-moving tortoise. Tired of the hare’s behaviour, the tortoise challenges him to a race. The hare soon leaves the tortoise behind and, confident of winning, takes a nap midway through the race. When the hare awakes, however, he finds that his competitor, crawling slowly but steadily, has arrived before him.
One might draw a similar parallel with the MAPS Passive Risk 4 portfolio. While it has a lower volatility than the IA 20-60% Mixed Investment Sector Average (*), it has a better overall track record.
In fact, over each of the seven calendar years since the portfolio was launched, the MAPS P4 portfolio has performed better than the IA sector average. Slightly higher returns in good years and lower falls in the poor year:
This adds up to over 10% higher return over the 7 year period. And a long way ahead of inflation (RPI) and cash in the bank (see chart below):
But what about next year? It is of course impossible to predict the future, but to the end of July 2021 the MAPS P4 portfolio once again has its nose in front:
The moral of the story? TCF Investment’s steady and methodical approach starting with a sensible base asset allocation which is aligned to the leading risk profiling tools used by advisers – then making small and occasional tactical asset moves, using a wide range of underlying funds, and keeping investment costs down, may seem unexciting, but in the long run this approach may well be the key to investment success and good client outcomes.
(*) the IA 20-60% Mixed Investment Sector is the IA sector into which MAPS P4 would be classified if it were a fund instead of being a model portfolio.
For more MAPS performance information and latest investment report click here.
Source: FE Analytics
The value of investments will fluctuate, which will cause values to fall as well as rise and investors may not get back the original amount invested. The figures refer to the past and past performance is not a reliable indicator of future results. The numbers do not reflect the performance of actual portfolios. To the extent that the assumptions (see below for main assumptions) used to calculate the model performance figures are not experienced by actual portfolios then actual portfolio returns will differ, positively or negatively, from those calculated. Returns are expressed as a percentage and represent an estimate of time-weighted total return over the relevant period. The main assumptions are: i. instrument total returns are as per data from Financial Express; ii. a proxy benchmark return is assumed for the cash return; iii. transactions resulting from rebalances or changes of model occur at the date of the Investment Committee meeting which considered changes to the portfolios (unless the Investment Committee resolved a later implementation date, in which case transactions are assumed to occur at that date); iv. the estimates are net of the OCFs of the underlying investments used in the models (i.e. are included); v platform / wrapper fees are not included; vi. no transaction costs are assumed.
Whilst reasonable care has been taken in the preparation of this document, no reliance can be placed upon it and advisers should complete their own independent due diligence. MAPS accepts no liability for any inaccuracy or omission in this document. MAPS does not provide financial advice. Investors should seek independent financial advice from a professional if they are in any doubt about making an investment. Past performance is not a reliable indicator of future results. Issued by Multi-Asset Portfolio Solutions (“MAPS”). MAPS is a trading name of TCF Fund Managers LLP, authorised and regulated by the Financial Conduct Authority. Registered in England and Wales with company number OC305442. Registered office: 220 Vale Road, Tonbridge, Kent TN9 1SP.