Welcome to Citywire Selection: The guide to our best investment ideas

We all like choice in our lives. We want to choose the right car depending on whether we prefer comfort to speed or the right washing machine according to whether we need one with extra capacity or want to limit our carbon footprint.

What we do not like is too much choice. An array of 500 digital cameras is just too much. Far better is a handful of choices made for us by people we trust – the best in each market segment (SLR/compact/10 megapixel or more etc) with a couple of alternatives so we can still exercise some discretion.

Guided choice, as the process is known, has been around – and loved – for decades. It originated with concepts such as the Good Housekeeping Seal of Approval, the Good Food Guide and Which? magazine. In the past decade or so, guided choice has taken on a completely new dimension as the internet has enabled ‘crowd-sourced’ opinion to be added to expert guidance. Think Amazon feedback or Tripadvisor hotel ratings to see the power of the people in action.

Guided choice is at the heart of Citywire Selection, which we are proud to launch this month. We have sifted through thousands of investment products to produce a distilled list of around 150 of what we consider to be the best ideas that you may consider for your clients. The list is compiled entirely without fear or favour.

The creation and composition of Citywire Selection reflects several of the major themes that govern investment advice and wealth management today.

The first is the sheer variety of investment ideas available. The concept that every client is different has always been an underpinning of the investment world. Today, there are the tools out there to construct portfolios that really do meet individual requirements. Citywire Selection covers ideas in more than 50 investment sectors ranging from agricultural equities to global bonds and from infrastructure to Bric funds.

This in turn reflects the increasing importance of multi-asset investing in a world where asset allocation is becoming ever more important. Asset class correlations are in constant flux, throwing up new opportunities (and pitfalls) on a regular basis, which all bear examination. There is scarcely an investment corner of the world that is today untouchable by a recognised and regulated investment vehicle with acceptable levels of liquidity.          

The final theme is that of investment vehicle agnosticism. The majority of the investment ideas in Citywire Selection are open-ended authorised mutual funds (albeit ones covering a far wider range of investments than they did even five years ago) but you will also find plenty of investment trusts and exchange traded funds (ETFs). Whether driven by client demand or regulatory pushes such as the retail distribution review,  investment professionals need to scan the full horizon to find the most appropriate vehicles for their clients.

The inexorable rise of ETFs  is particularly interesting. Low-cost and transparent, their inclusion here adds nothing to the somewhat sterile passive-versus-active argument but says rather more about their utility in aiding efficient portfolio construction.

So how did we draw up the initial Citywire Selection? Drawing on our Citywire Fund Manager Rating heritage, we started from a quant base, looking for funds that could demonstrate consistent outperformance with regard to the risks their managers took to get there.