12 November 2018
By Jim Roberts, Chairman of the Verbatim Investment Committee
All of us will have come across the apocryphal saying, 'may you live in interesting times.' It purports to be a Chinese curse, the implication being that whilst times of peace and happiness are un-noteworthy, periods of war and uncertainty are of great significance and therefore 'interesting.'
Currently, we find ourselves beset by uncertainty: political, economic and social. Our daily news services seem to revel in keeping us alert to the multiple threats: Brexit looms with no solution in sight; President Trump seems intent on a major trade confrontation with China; the oil price is at a four-year high; the Middle East is in turmoil, and even a day trip to a quiet cathedral town has acquired high-risk status. More recently, the likelihood of a Labour Government Chancellor of the Exchequer who lists one of his hobbies as ‘fermenting (sic) the overthrow of capitalism’ has shifted from 'highly improbable' to 'a distinct possibility'.
Some newspaper editors seem to believe that fomenting fear is an essential part of their job description. Perhaps worrying news stories do sell more papers than reassuring ones, but someone has to steer a steady course, whatever the challenges. From an investment perspective Verbatim shows the way.
The Verbatim portfolios’ strategic asset allocation system is constructed on the well-established principles of portfolio optimisation. It avoids an over-concentration of risk, aligns each portfolio with its volatility target thus maximising the capture of the upside potential.
The strategic allocations do not vary a great deal, as there is little evidence to suggest that asset allocators succeed when they make the ‘big calls.' CNBC and Bloomberg may laud the man or woman whose investment hunch paid off, ‘The man who called the 2008 crash’ may well become a regular contributor, but where are the ones who wrongly called the 2015/2016/2017 crashes?
Verbatim’s tactical decisions are delegated to managers chosen because of their specific skills. They are given sufficient discretion to capture the returns that their expertise reveals, but only within the boundaries of their risk grading. This ensures that the match between the clients’ risk appetite and the funds’ performance is maintained.
The results over the Verbatim funds’ eight year history are reassuringly impressive. In the short term, over one year to the end of August 2018, all six funds have beaten their benchmarks and produced returns well in excess of those of some of the most feted ‘names’ in fund management. Over the long term, they have without exception delivered steady, consistent growth at volatilities closely aligned with their peer groups.
Some may say that the times we live in are unprecedentedly 'interesting,' but Verbatim will simply ‘Keep Calm and Carry On’. To some, this is a meaningless cliché. To Verbatim, it’s a way of life.
The value of investments and any income from them can go down as well as up and is not guaranteed. Your clients could get back less than they originally invested. Past performance is not a guide to future performance. The portfolios' investments are subject to normal fluctuations and other risks inherent when investing in securities. Verbatim Asset Management has taken due care and attention in preparing this document, which is solely for the use of professional advisers. Verbatim cannot be held responsible for any inaccuracies arising out of information detailed within and will not accept liability for any loss arising out of or in connection with its use.