Stonewood blends the benefits of multi-asset portfolios with strategic asset allocation. The inclusion of multiple uncorrelated asset classes in a portfolio brings the total volatility and variability of returns within a portfolio down. This, in other words, leads to a lower level of risk for a given level of expected return. The reason this happens is that all asset classes have different characteristics which cause the assets to react in different ways to various market and economic factors. The use of multiple assets at the same time allows for certain risks to be reduced without sacrificing return expectations.
We combine and utilize the entire spectrum of possible implementation tools and therefore can harvest the best that the Passive, "Smart Beta" and Active management strategies have to offer. This ensures that our focus on getting the most out of asset allocation in terms of return generation and risk reduction is possible without having to exclude any strategy type.
The inclusion of all three management types is incorporated to maximize our opportunity set and increase the probability of improving the portfolio outcomes. "Smart Beta" is a new concept in portfolio management that blends the benefits of low-cost passive management with the optimization of well-researched anomalies in the investment world. It is often considered a blend of active and passive management.
The main outcome of the philosophy is to ensure that clients are exposed to the optimal allocations in each asset class. This creates robust investment portfolios that match the mandated risk profile for each of the funds available. The inclusion of passive and "Smart Beta" allocations gives the fund a more cost-effective profile which should give the portfolios an advantage of the traditional portfolios offered to investors.
We have created a wide range of risk profiled multi-asset portfolios’ to cater to our client base. All of our unit trusts are Regulation 28 compliant, making them suitable for retirement planning and discretionary investment clients. We try to offer a set of solutions that can be used as standalone portfolios for any client in an investment vehicle/wrapper or be blended with other asset manager funds to complement their portfolios characteristics.
The fact that all of our funds are not actually Fund of Funds, by design, means that there is great flexibility in how we design our portfolios. This flexibility allows us to select assets that we know will complement the overall investment strategy.
All of our funds are multi-asset portfolios, suited for different risk profiled clientele. We have everything from conservative local portfolios to aggressive offshore investment solutions. All constituents of the portfolios are rigorously assessed on a quantitative and qualitative basis. Where external fund managers are used within the portfolio construction we ensure that we use companies that have a long track record of consistent performance that synchronises with our overall asset allocation plan. We ensure that all underlying managers undergo due diligence checks to ensure that they are suitable custodians of certain portions of our portfolios.
The result is a set of funds that are built to be as robust as possible to ensure we are able to achieve our goals on a consistent basis.
We are also extremely cost-conscious and the inclusion of some passive and "Smart Beta" building blocks assists us in ensuring that the total cost to the client is as low as possible.