how we invest
How we invest

TRH avoid the use of actively managed investment strategies within its clients’ portfolios in favour of an asset class approach to investment. 

Active investment managers try to beat the market either through their own skill or by picking professional managers whom they believe will do so.

Having considered a wealth of evidence on this subject, we do not believe that an active management approach can consistently deliver a return in excess of that available from the market as a whole. In addition, active management is also inefficient due to the high fixed fees and trading costs incurred.

Asset class investing is a rational and robust model of investing based on science rather than speculation.  Our portfolios deliver the performance of capital markets by capturing the returns from specific asset classes. 

TRH aims to increase expected returns and control volatility by blending the asset classes in the most optimal way. We believe that this strategy delivers a low cost and effective alternative to active management.

TRH select only those asset class investment funds which we believe are the best available in the market. At present our portfolios include investment funds provided by our investment partners at Dimensional, BlackRock and iShares.

Portfolio Structure and Management

We have identified six critical steps to successful asset class investing.

  1. Get the asset mix right
    The optimal allocation to the different asset classes within a portfolio is governed by a client’s individual risk profile and their long term financial goals.

  2. Diversify to avoid market uncertainty
    A diversified portfolio of different asset classes reduces the expected volatility of future returns.

  3. Protect wealth from inflation
    Inflation risk is particularly pertinent to our clients who are approaching or are in retirement requiring their wealth to sustain their desired standard of living. 

  4. Manage costs as they erode wealth
    A pound of costs saved is no different from a pound of market performance in monetary terms, yet it is far more valuable due to its consistency over time and the fact that it is achieved without taking any risk.

  5. Control emotions and stay invested
    The emotional impacts of regret, pride, greed and panic can result in trying to time markets and the excessive taking or avoidance of risk.  This usually results in reduced investment returns over the long term.  Simply by remaining invested, this additional risk can be avoided.

  6. Rebalance portfolios to avoid excessive risk
    Regular rebalancing back to an agreed asset allocation ensures that a portfolio continues to capture the expected returns.

Portfolio administration

Most of our clients hold the majority of their investable assets on an administration platform provided by Transact. This platform allows our clients to see the value of all of their investments in one place, reduce administration and also allows TRH to manage their portfolios effectively.

We’ll tell you more about our investment partners when we meet. 

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