Credo Wealth is proud of an investment process which shuns short-term fads and of taking a holistic view of its clients’ financial wellbeing. The result has been impressive organic growth.
Every client is different so we spend a lot of time finding out about the client, their appetite for risk and their aspirations – that’s not only their financial ones but also their future plans, ambitions and concerns. From that you form an opinion on how their assets should be invested in the right way for the individual. Spending the time with each client to really understand their ambitions – that’s the key to it all. Our process even goes as far as establishing clients’ attitudes towards Capital Gains Tax, which is pretty detailed.
Our investment philosophy is based around high-conviction investing. We believe in active allocation and will combine active and passive funds to gain an exposure to an asset class. Our approach is to create balanced, individual portfolios, composed of the best investments across all asset classes, in order to provide strong and consistent risk-adjusted returns over the medium and longer term.
We look to add value through both top-down asset allocation and bottom-up security selection. We use a core model portfolio (GBP, USD and EUR) as a guide for investment managers to indicate the in-house views that we have on asset allocation. Changes are made to the asset allocation depending on prevailing investment conditions and our view of the likely short- and medium-term expectations for each of the asset classes.
Our Investment Committee is ultimately responsible for our investment policy decisions and the construction of portfolios. The Investment Committee agrees and communicates our current views and stance on each asset class. They consider “bottom up” analysis and recommendations from in-house sub-committees (Equity Committee, Fixed Income Committee, Authorised Collectives Committee, Investment Trust Committee, Non Standard Investments Committee).
Risk management tools are employed to monitor and control exposure to any single stock, fund, investment house or alternative investment.
With open architecture we look at the whole investment universe and we have nine people in investment research, so we’re really delivering an institutional-type service to private clients.
We have Vestra Ventures, a specialist team covering Enterprise Investment Schemes, Venture Capital Trusts, property and private equity investment opportunities. Our US subsidiary, Vestra US Wealth Management Limited, works with US-connected clients and creates portfolios that take into account clients’ need for income and growth, as well as the relevant tax and investment constraints resulting from exposure to multiple jurisdictions.
Investors who want investment portfolios with ethical restrictions is also quite a big area for us. We do both positive and negative screening. With positive screening, for example, it’s looking for companies that proactively replant or do something about waste or water shortage. Then there are those clients who want to screen things out – for example no tobacco, no alcohol or no armaments. We cater for both. We have an advanced ethical screening database which means we can adapt to any requirement and give clients exactly what they want. [Duncan Carmichael-Jack is an award-winning fund manager who has been running ethical money for some 18 years].
I’d highlight the fact that we recognise the limitations of benchmarking when we’re selecting investments for clients. Our investment advice is based on conviction investing where we select an asset because we believe in it as opposed to selecting it because of a benchmark. You can be benchmark aware, but you’ve got to make sure those aren’t leading your clients into a risk category that’s completely wrong for them.
For example, you may have a client who is looking for income and where capital preservation is also important. So you tick certain boxes that benchmark them to the Government Bond Index, for instance. When you review the fixed income universe, you’ll see that there are what appear to be “safe” Italian or Spanish or Greek government bonds. But then there’s an explosion in the PIGS economies and their bond markets collapse and the clients loses huge amounts of capital because you’ve tried to keep up with an index. Whereas by looking at the logic of what you’re trying to achieve, of what the client actually wants, then you may conclude that if they want preservation then inflation is an important factor because inflation is what you’re trying to beat in preserving capital and maintaining spending power. You should therefore be steering them more towards index-linked, floating rate notes and those types of investments as opposed to trying to hug the Government Bond Index.
Another example may be that there is property in an index, but that could be irrelevant for a client if they own a lot of property already. Why would you add more property just because a benchmark index has an allocation to property? It’s about thinking things through and not getting too influenced by a benchmark.
If you’d like to start a conversation with Vestra Wealth please contact the Find a Wealth Manager team HERE. They will ensure you get direct access to the investment professional who matches your profile.