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Wealth Manager: Rathbone's Edinburgh duo on building stability in an over-broked battleground
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by Danielle Levy on Oct 10, 2013 at 00:01
With this in mind, Gunn’s team tends to err on the side of caution when running money for pensions.
Rathbones recently opted to revamp its asset allocation framework to make it more ‘forward-looking’ by introducing three new distinct asset class categories based on their liquidity and correlation characteristics. Underlying asset classes are divided into ‘liquidity’, ‘equity-type risk’ and ‘diversifiers’
Gunn adds: ‘It is important that once a Sipp is in drawdown you manage the volatility sensibly and you have a process that allows you to do that.’
The teams receives top-down guidance from the strategic asset allocation committee, alongside bottom-up recommendations from the fund and stock selection committees.
‘The stock selection committee is drawn from investment managers with a lot of different strengths from around the group and we have a long list of UK equities that are currently recommended,’ Dewar notes, adding that this is not prescriptive.
As they tend to run Sipp mandates, the team are generally more cautious in their stock selection, favouring companies with high gross margins that can be sustained and grown over time, strong dividend cover and a high return on capital.
At an asset allocation level, the team are positive on equities over bonds, favouring developed markets, particularly the UK and US.
They also have a smaller exposure to Europe, where Dewar notes there are value opportunities but also headwinds. Although the strategic asset allocation committee remains positive on Japan, it is not an area the team has much exposure to.
Looking at the local wealth management landscape, Gunn acknowledges there is no shortage of competitors, with Edinburgh one of the most over-broked cities in the UK.
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