Choice in Portfolio Construction Tools

During this uneasy period for the World’s economies and the instability in the markets the MultiManager platform, used by Butcher & Moody Financial Services, is again proving it’s worth. This may cause existing customers to consider their attitudes to the risk in their investment portfolios. To this end Butcher & Moody will be sending out risk profile questionnaires to these customers in the near future.

The MultiManager platform allows Butcher & Moody to take quick action based on their clients’ attitudes to risk and adjust their portfolios accordingly.

Butcher & Moody have a wide range of tools to assist in the informed decision making process for their clients:

Asset Allocation
We are able to build our client’s asset allocation through a variety of methods:

Investment Management
We are able to outsource the choice of asset allocation by choosing from a range of Investment Management funds.

Optimised Portfolios for Yield or Growth
Using Watson Wyatt data we take the client’s risk profiling result and within the parameters ‘Optimised for Yield or Growth’ provide relevant asset allocations. These results can be re-optimised and recalculated based on client’s aversion to, or preference for certain sectors.

Lipper Asset Analysis Models
Butcher & Moody have use of any of the industry consensus asset allocation models provided by Lipper.

Building Our Own
In liaison with client’s Butcher & Moody build bespoke asset allocations. Where there are particular sectors where clients feel comfortable we make use of blended sector solutions.

Copying An Existing Portfolio
Butcher & Moody are able to copy and edit existing and successful portfolios.

Fund Selection
With access to over 950 funds and comprehensive research tools Butcher & Moody are able to make informed choices for our clients. This facility allows for the use of over 30 data items, for example:

Ratings
Citywire and Forsyth-OBSR

Fund Data
Annual management charge, discounted initial charge, relative tracking error, actual expense ratio, launch date, fund size, fund manager tenure, fund yield over one year, fund yield over three years, IMA sector, annualised growth rate and positive months.

Risk/Return Matrix
Over three years.

Yield
Running yield and payment date.

Performance
Cumulative performance and sector quartile rankings. Discrete performance and sector quartile ranking.

Risk Measures
Volatility and sector quartile ranking, annual alpha, annual beta, maximum loss, maximum gain, risk evaluator number, annual sharpe ratio and annual information ratio.

Filtering
Once the data has been customised, filters can be applied to narrow the range of funds. For example only using funds with AA Citywire ratings or above, or funds with a certain level of volatility.
Applying filters and narrowing fund choices allows Butcher & Moody to select the appropriate funds for their clients. There is also detailed information on the funds – fund datasheets and analysis available.

Audit Trail
Each step of building a portfolio is recorded in an audit trail. This provides and end report detailing the answers and outcomes of risk profiling questionnaires, the chosen model and any amendments made, the research items and filters used and the funds selected.

Reporting
At the end of the process a report is available to reveal what is happening beneath the skin of the portfolio, including sector breakdowns, top ten holdings, stock overlaps and volatility. All of this adds up to give a robust, compliant audit trail.