TRAILS™ Review

We constantly review our TRAILS™ funds and all of our model portfolios to make sure we have, what we consider to be the most appropriate funds and risk-rated models to give the best return potential.

Every year in January, we meet with all the fund managers we use, as well as doing our own research, and we determine whether any small or large changes should be made to our models. This could include fund switches, changes to the asset allocation, the geographical weightings, or the tilts to small cap and value funds.

Conclusion:

After considerable modelling, we have decided not to make any changes to our funds or models. The only advice is to re-balance back to the original template as we look to do every February and to remind you of our core investment philosophy (see the document to the right below).

N.B.

  • We will be re-balancing all TRAILS™ portfolios on Thurs 24th February.
  • If you have a GIA we will check beforehand regarding CGT implications and advice.
  • If you have used some or all of your CGT allowance for 2021-22 please let us know.
  • If you invest in TRAILS™ Ethical you will receive a personal email with implications and advice.

Rationale:

It is only worth making a change if you feel good will come of it. Given the current economic climate at present, of higher-than-expected inflation, and the concerns over rising interest rates, we felt we may alter the bond weightings or bond types in some of our models.

However, if you wish to increase your equity exposure to combat the risks of high inflation you can alter your risk profile and move to a different TRAILS™ portfolio. And we already took a more global approach to our bond funds last year. Yes, we may still see poor bond returns as we have done over the last 12 months, but:

“Bonds are the insurance policy of our portfolios”

The pandemic is not yet over and there are political and economic tensions between certain countries that have precipitated recent global volatility in stock markets. This is why holding bonds can be very useful because they help moderate risk and reduce volatility. One should not look at recent past return and extrapolate anything from it. Focussing on the long term and remembering why we hold bonds is the smart approach.

“The investor’s chief problem – and even his worst enemy – is likely to be himself.”

Benjamin Graham – American Economist, 1934

You can say something is over-valued or under-valued, or that it is in, or out of favour, but all of these are akin to predicting, forecasting or making a tactical call on what may happen. At Tandem we prefer ‘strategic asset allocation’ where you buy and hold, as opposed to ‘tactical asset allocation.’

Deciding to alter geographical weightings (e.g. reducing exposure to one country over another) or altering the tilts to small cap or value significantly, means making a call or a prediction, and we do not play this game.

History has shown us that holding a market-cap weighted portfolio of low-cost index and passive funds has given the best potential for a risk-rated return without incurring unnecessary volatility.

See the TRAILS™ Performance Data PDF showing returns over the last 10 years for all of our model portfolios.

Want to change risk profiles or discuss Ethical investing?

Should you wish to discuss your risk profile (with a view to changing it) or if you wish to discuss Ethical investing (or anything else we can help with), please complete the form below with your first name, surname, email address and elaborate in the notes section.

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Notes

Below are some useful guides you can download:

Click HERE and log into TRAILS™ Online to find our more. Your password is at the top of the latest TRAILS™ email.

1. If you and your spouse use the same email address, please complete and submit the form twice with each person’s first and last name.

2. After pressing submit, you will be sent an email confirming your acceptance.

3. Should you wish to change TRAILS™ portfolio (to one higher or lower risk), you can absolutely do this and there is no charge. Please contact us to discuss.

Please feel free to call or email us if you have any questions.

T: 01438 879 262

E: [email protected]