Asset Allocation Performance

How does our asset allocation perform?

We have developed an objective methodology for allocating investment between the asset classes.

  • First we consider cash to be as important as any other asset class
  • We start by looking at the expected real return on cash
  • Then we decide what percentage of a portfolio should be invested in cash
  • Only then do we turn to the riskier asset classes of bonds and equities

The graph on the left below shows the performance of the three asset classes of equities (FTSE All Share), bonds (5-10 year gilts) and cash as individual assets. The graph on the right superimposes the performance of our methodology (Asset All.) which allocates between the three assets to achieve the best risk adjusted returns.

IpsoFacto Investor asset class performance

 

 

 

 

 

 

 

IpsoFacto Investor asset allocation performance

 

 

 

 

 

 

Over this 10-year period our methodology would have slightly outperformed equities; but, most importantly, the volatility of returns (the peaks and troughs of the line) is much lower for our Asset Allocation methodology than for the FTSE All Share. This means that the risk of buying at the top and selling at the bottom is diminished.

RISK WARNINGS

These are past performance and simulated past performance figures (in the case of Asset All.). Past Performance is not a reliable indicator of future results.

The figures shown here are before the effect of any charges.

The figures are calculated from the performance of the FTSE All Share total return Index (FTSE All), the 5 – 10 year gilt FT total return index (Gilts) and reinvested interest on cash earning the base rate (Cash) to 30.09.16. The performance of the asset allocation model (Asset All.) comes from active allocation between the three asset classes based on certain pre-determined criteria.

FTSE All Gilts Cash Asset Allocation
10 Years 73.7% 84.4% 13.8% 88.8%
5 Years 58.7% 20.0% 2.4% 41.8%
3 Years 24.7% 17.9% 1.4% 17.7%
1 Year 22.5% 3.9% 0.3% 13.1%

 

FTSE All Gilts Cash Asset Allocation
28.03.08 -8.0% 10.1% 5.7% 0.3%
03.04.09 -29.6% 13.6% 3.7% -15.5%
01.04.10 53.9% 0.4% 0.5% 32.4%
01.04.11 10.0% 6.2% 0.5% 8.8%
30.03.12 -0.2% 15.4% 0.5% 9.0%
29.03.13 16.8% 5.4% 0.5% 13.4%
28.03.14 8.9% -3.4% 0.5% 6.2%
02.04.15 7.5% 9.2% 0.5% 7.4%
01.04.16 -5.3% 3.9% 0.5% -3.1%
31.03.17 22.5% 3.9% 0.3% 13.1%

These do not include charges and are not necessarily reflective of what could actually be achieved but are merely illustrative of different asset class performance and the potential benefits of asset allocation.

This performance comes from the following percentage annual returns.This is a simulated past performance record and does not reflect actual results.