|
OUR INVESTMENT PERFORMANCE - THE JAVELIN MODEL PORTFOLIO
|
|
|
|
 |
| |
|
| |
| OUR INVESTMENT PERFORMANCE - THE JAVELIN MODEL PORTFOLIO |
|
|
|
For information purposes only, Javelin Wealth Management, runs a model portfolio with a moderate risk profile and which has an absolute return mandate. The composition of the portfolio is reviewed on a monthly basis and changes are made as and when necessary. In calculating returns, we have made allowance for notional dealing costs and advisory fees.
Before we look at an illustration of our track record, we need to emphasize the following:
Since the portfolios we advise on are created in response to each client’s individual investments needs and risk appetite, no one client portfolio is the same and therefore each performs differently, depending on different market and investment conditions.
However, it is important to emphasize that returns are a function of risk, time and costs:
| (1) |
Risk: Lower risk portfolios will be less volatile, but will see lower returns. Higher risk portfolios will be more volatile and should see higher returns over any given investment cycle.
|
| (2) |
Time: We don’t advise on short-term investments and are not “traders”. Our investment portfolios are created with a minimum investment time horizon of at least 3 to 5 years. Having said that, we obviously monitor all our portfolios to ensure that the investments within them continue to perform as expected and that there has been no material change in circumstance which would warrant a change of view.
|
| (3) |
Costs: No portfolio or investment should be established without having a clear understanding of the costs of establishment and ongoing administration. Often these can be substantial, meaning that your portfolio has to perform strongly in order to produce a decent return for you after these costs have been deducted. At Javelin, we ensure that our costs are kept reasonable, fully transparent and are geared to the performance of your portfolio, rather than being loaded upfront or purely based on the original sum you invest. Similarly we do not charge a penalty fee if you wish to liquidate your portfolio at any stage.
|
A typical “moderate risk” portfolio, based on our Javelin Private Portfolio discretionary fund of funds, has returned an average annual return of about 8% over the 2004 – 2009 period, after deducting all fees and charges (the same charges that are made against client portfolios and our own). The volatility over this period has been about 7% (volatility measures the degree to which the monthly change rises or falls by a greater degree than the average return), which compares with about volatility of about 15% for a typical “developed” stock market.
2008 was a challenging year, for all investors. By adopting a conservative stance and essentially recommending that all our clients exit most, if not all of their equity holdings from late 2007 through to September 2008, we were able to limit the worst of the damage. In 2008, the MSCI world index fell by 40%. The Javelin Private Portfolio declined by 20% during this period.
In 2009, we began to get reinvested in equities from early April, with the result that the portfolio recovered by 20% during the year. We admit that we were slower to participate in the rally than we would have liked, but skepticism about the strength of economic recovery was high throughout this period, and remains so during 2010.
For our most recent factsheet of the model portfolio, please click here.
|
|
|
|
| |
|
