βetter Portfolios…

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Adviser's Alpha Enhanced

Our ongoing portfolio governance frees up the adviser’s time to focus on helping their clients avoid behavioural mistakes that often damage returns.

Low Cost

The typical annual charge for the portfolios is 0.25%, which means clients are given the best possible chances of meeting their goals, at the least possible cost.

Global Asset Allocation

Global diversification means that Betafolios are less susceptible to country-specific risk and capture returns across different capital markets around the world.

Risk Rated

The portfolios are mapped to major industry risk profiling tools and rigorously tested to ensure they are within the specified risk/return parameters.

Intelligently Designed Model Portfolios

Our unique offering to Financial Planners: 10 Evidence-Based Portfolios designed based on time-tested investment principles, which draws on decades of academic research by renowned economists and practices of leading institutional investors.

Elegantly Curated Client-Ready Content

We create range of premium, client-ready articles that Financial Planners can use to engage clients and prospects about evidence-based approach to investing.

Our Investment Philosophy

Grounded in the work of Nobel Prize-winning economists and leading institutions
Eugene Fama

Eugene Fama

Nobel Prize in Economics (2013)

William Sharpe

William Sharpe

Nobel Prize in Economics (1990)

 

#1 – Markets Works

In a ground-breaking paper, Gene Fama (1970) demonstrated that while capital markets are far from perfect, they do a good job of fairly pricing all available information and investor expectations about publicly traded securities. This assertion is constantly challenged, most prominently by Shiller, 2003, but it remains by far the best evidence on how ordinary investors should approach investing.

#2 – Portfolio Structure Drives Return

Markowitz (1952) and Sharpe (1964) demonstrated that the way to maximise returns for any given level of risk is to combine asset classes rather than individual securities.  Brinson, Hood and Beeower (1986) suggested that 93.6% of the average return variation in a US pension plan portfolio from 1974 to 1983 can be explained by asset allocation. Ibbotson and Kaplan (2000) confirmed that, in fact, asset allocation explains approximately 90% of the variability of portfolio returns over time.  Blake, Lehmann, & Timmermann, (1999) found that the total return of UK pension funds is dominated by asset allocation. The typical return from stock selection and market timing is negative.  Accordingly, ßetafolio is designed using the right mix of mainstream global asset classes, to meet specific risk and return objectives.

#3 – Costs Matter, Hugely

Over long time periods, high fund charges can be a significant drag on wealth. A 2010 Morningstar’s research shows that fund expense ratio is a far more reliable predictor of future performance. William Sharpe (2013) demonstrated that, under plausible conditions, an investor saving for retirement who chooses low-cost investments could have a standard of living throughout retirement more than 20% higher than that of a comparable investor in high-cost investments.  Accordingly, our approach is to select low-cost funds and the typical on-going charge for Betafolio of around 0.25%

Robert J. Shiller

Robert J. Shiller

Nobel Prize in Economics (2013)

 

Harry Markowitz

Harry Markowitz

Nobel Prize in Economics (1990)

 

Paul Samuelson

Paul Samuelson

Nobel Prize in Economics (1970)

 

Daniel Kahneman

Daniel Kahneman

Nobel Prize in Economics (2002)

 

#4 – Behaviour Counts. Discipline Pays Off

The work of psychologist Daniel Kahneman and others has given us a much deeper understanding of our people behave under uncertainty. All too often, investors let their emotions get the better of them with dire consequences for investment returns. A Cass Business School study by Clare & Motson (2010) showed that the gap for an average UK equity fund and a typical UK equity fund investor around is 1.2% a year over the 9-year period ending 2009.  Lukas Schneider (2007) showed that the performance gap was as much as 2.43%pa for UK smaller companies funds and 2.06%pa for growth funds over an 11-year period between 1992 and 2003.  The plausible explanation is that investors are chasing past winners and are therefore ending up buying high and selling low.
ßetafolio maintains disciplined approach and stays the course even extreme market conditions. We only work with financial planners who commit to helping clients to deal with the ‘behaviour gap’ by being the voice of reason in extreme market conditions. A whitepaper by Vanguard suggests that the discipline and guidance that an adviser provides through behavioural coaching adds an estimated 1.5%pa net return, when compared to an average DIY investor, and could be the largest potential value-add by advisers.  The is what we call “Adviser’s Alpha’.
What is Evidence-Based Investing?

It’s simply the conscientious, explicit and judicious use of current empirical evidence in making investment decisions. It draws on extensive empirical data, research by leading academics and practices of institutional investors to deliver consistent investment success to clients.

Do you work directly with consumers?

No. We offer services to regulated financial planning firms and accordingly, this service can only be accessed via an FCA-authorised financial planner.

Do you work with providers/networks/platforms?

Absolutely. Give us a call.

Can We Tailor The Portfolios To Our Firm?

Absolutely. Just choose our ‘Custom’ Option and we’ll get the process started. We’ll start by understanding your views and what customisation you want to make. Then we’ll explore the evidence whether or not this adds value to the portfolios.

What do you mean by 'client-ready content'

This is content – videos, articles and infographics –  that you could share with clients, without any need to check with compliance. No industry gibberish! No questionable and mind-boggling data! Just simple, yet insightful stuff in plain English. Once we have accepted your subscription, you’ll have access to our content library which includes videos, articles and infographics. You can pick whichever ones you want, add your own logo, put it on your website, include in your Newsletters, share on social media – it’s yours to do as you will. Off course, we’ll add new content every month. The idea is to present a fresh perspective on the latest debates and conversations about how clients’ monies are invested.

Join The ßetafolio Revolution

βetter Portfolios. βetter Client Outcomes.