Rootes Investment Approach

Rootes Wealth Management - Managed Portfolio Service
How to build an investment portfolio?
There are lots of ways to build an investment portfolio. It’s a bit like the question, what is the best investment?
You can pick your own individual stocks and shares. This is known as a do it yourself (DIY) investor as it does exactly what it says on the tin!
Alternatively, you can pay a firm to provide a portfolio for you. There are lots of variants in the middle.
At Rootes Wealth Management, we operate around 10 centralised portfolios covering different risk levels and different aims. We have portfolios for both growth and income and will look to match the right portfolio for your circumstances.
What is a portfolio? This is a combination of funds that looks to be worth more than the sum of its parts. Typically, there will be a combination of share and bond funds and the weighting between the two helps determine the risk level of the portfolio.
Bonds (typically lending to a government or a company) are generally perceived as a more defensive asset class with shares (owning parts of publically traded companies) being the riskier part. Over time, you would expect to see shares out perform bonds but over the shorter term, shares can struggle, which could mean that bonds, or even cash outperform.
The value of investments can go down as well as up and you may get back less than the amount invested.
As part of our service to you, we’ll consider your attitude to risk (recorded through a multiple-choice questionnaire) and your personal financial situation try and find a level that gives you the growth you need, without causing you sleepless nights.
Brief introduction
Rootes Wealth Management offers a range of centralised portfolios, that have been built to provide logical, pragmatic options for our clients. These include 6 portfolios for growth, 3 for income and 1 that tries to take into account Environmental, Social and Governance (ESG) factors. This is a specialist portfolio that will not be suitable for everyone.
We use collective or pooled investments, which means we do not recommend individual securities. Once we have assessed what we are looking for, we look for external fund managers to provide the day to day management of the funds.
These portfolios are reviewed quarterly (January, April, July and October) and we look at where the opportunities and threats are in the world, whether we need to change how much is in bond funds or how much is in equity funds (shares), how the individual funds are performing. Are they providing value for money?
At the end of this process, we write to clients with an investment commentary and 3 possible outcomes:
• No change – we’re happy with things as they are
• Rebalance – some funds may have performed very well or badly and we want to bring them back into line with the target weightings
• Switch funds and rebalance – we may decide to recommend selling fund A and buy fund B
This is an advisory process so we recommend the changes to you and ask you to agree the changes. This can be as simple as responding with a “yes, please proceed” message.
Our objectives
The aim is to provide good value for money solutions for you that keeps you informed and in control. If you have questions, we are there to answer.
Portfolios are matched to clients to help them meet their goals. Some clients are seeking a steady return. For others we accept that investments can fluctuate or jump around and we embrace that to try and achieve superior results over the long term.
There is no one approach that works for everyone and what works for you now, might not work for you in 10 years time.
Our investment philosophy
We think that there is a danger of trying to be too clever. We are not trying to beat the market, no matter what the world throws at us. What we are seeking to do is be:
• Logical – does our positioning make sense based on how we see the world
• Robust – and what if we’re wrong? We critique ourselves and look for opposing views to strengthen our process
• Repeatable – We want to build a process that stands the test of time. It is no good having one great year and lots of mediocre years. We do not want to have to reinvent the wheel every time the markets change
We seek to have a solid foundation that can stand the test of time and then tilt the portfolios by changing fund allocations, to try and either take advantage of opportunities or avoid areas that we think have become too hot.
For example, shares may look incredibly expensive whilst bonds are offering a stable, attractive return. We may well decide to sell some equity funds (shares) and buy some bond funds.
Equally if the market falls and shares look cheap compared to their prospects then we may decide to sell bond funds and buy equity funds (shares).
We do not recommend changes for the sake of it and all changes are carefully thought through.
The importance of being diversified
A key part of our approach is to be diversified (spreading risk) but what does that mean? It means that we never go all in on any one idea. Say we felt very strongly that the US was the best place for investments, you could look to put everything into US funds. If you’re right, you could make a lot of money. If you’re wrong though you could lose a lot of money.
Diversification would mean that instead of putting everything in US funds, you would put a sizeable amount in US funds and then counter that with funds somewhere else. Ideally that something else would behave very differently. But it is no good if one part of your portfolio goes up and the other part goes down, then you’ve worked really hard to stand where you are.
Our approach is to find funds that make sense on their own and then look to weave them together so that we get the benefits of spreading our risk whilst hopefully achieving an attractive rate of return overall.
Fees - What does this cost?
This service forms part of our Wealth Management service, which is 0.25% of your fund value per year. It can only be added to our Financial Planning service, which is 0.75% per year, giving a total of 1%.
On top of this there is the cost of the account to hold your investments, which is around 0.25% and then the cost of the underlying funds, which varies from quarter to quarter, but our typical fee range is between 0.35% and 0.75%.
In total our average ‘all in’ charge range is around 1.6% to 1.90% a year.
There are minimum and maximum charges and sometimes we use investments that have no explicit charge and so the actual number may vary.
Want to learn more?
Call us on 01732 247 360 or email us at contact@rootes.co.uk to set up an initial consultation.
We’ll talk through your situation and then discuss how investments may be able to help you achieve your goals.
Why Rootes Wealth Management?
- Raising The standards of financial advice
- Making financial advice accessible to all
- Trusted & stress-free financial advice
- Friendly, personable advisors