Real Money

Effective Results

While we do not manage other people’s money, our CEO has relied on its recommendations exclusively for his own portfolio management. Both records are shown since inception. The pension fund was restructured in September 1998. The Securities Portfolio was started in September 2003. As can be seen both funds have substantially out-performed relevant benchmarks over these periods.

The pension is run as a flexible managed fund, free to invest in any equity or bond funds but restricted to those available within the family of funds offered by the provider. Performance is shown in comparison both to a global equity index and the default option, namely the managed fund of that provider.

The Securities Portfolio is run as a global growth fund, but restricted to securities quoted on a stock exchange in the United States. Performance is also shown in comparison to a global equity index. All figures represent total returns including capital gains, income and currency movements. Investment decisions are constrained by considerations of capital gains tax, which has varied between 18% and 40% over the period.

Clients may have performed better or worse depending on when they started, the choice of investment vehicles available to them, capital gains tax constraints and the extent to which they acted on the firm's recommendations.

Discrete Performance

Sometimes a fund may have had a single exceptional year, which masks many average years. Charts of discrete calendar year performance are designed to expose such erratic performance. As can be seen below, both funds have substantially out-performed in good years and performed approximately averagely in bad years

As this period includes the most severe global stock market setback on record, the performance does not seem to be due to a bias towards higher risk investments. 

Explanation This chart uses the FSA recommended approach for displaying consistency of performance by breaking out results for discrete annual periods. The pension fund is compared with the IMA Managed Pension Fund sector, because this contains publicly available funds with the same objectives and tax status.  The Securities Portfolio is compared with a global equity index because this is the benchmark for World Stock funds available to US investors, the closest available peer group.

Peer Group Comparisons

These are examples of what can be achieved in practice by individual investors using Investors RouteMap to manage their own funds, rather than out-sourcing. They are examples of what can be achieved in practice by institutional investors because they are easily replicable in alternative investment vehicles and highly scalable given high levels of secondary market liquidity as well as unit creation in exchange traded funds.

Comparisons with publicly available funds are of limited relevance because these two funds are not for sale.  On the one hand their performance is not penalised by management costs but on the other hand they do not have the freedom to invest in any stock or bond anywhere in the world.

Nevertheless for those interested in peer group comparisons, the most relevant categories of public funds are those engaged in global equity investment and global asset allocation. Based on statistics published by Morningstar, the table below shows the longest available track records, the numbers of funds that have been in operation that long and a percentile ranking of where these two funds would stand, if compared to the constituents of those categories.