Invest with peace of mind
As the pace of life gets ever faster, and world markets change more frequently, it is important that your investments are diversified, balanced and above all, actively managed. If you do not have the time and knowledge to do this, then it is best to consult a professional adviser.
Affinity Consulting Group's consultants are trained to give balanced advice and to take advantage of the structure that we advocate for active management. We use the best of technology to keep you abreast of your investments as often as you need the information.
Our consultants will help you decide on the level of risk that is appropriate and make suggestions on diversifying your investments over various asset classes. However, our philosophy is to use professional investment managers to allocate your money in each of the assets classes you select. We achieve this by advising you to use "funds of funds" as these have a manager who actively selects the best funds in the areas of the world that are doing well and he rebalances as the markets change. Funds of funds generally have better performance than the market indices and will usually give you better investment growth than trying to make your own selections and monitor them.
Advantages of a fund of funds strategy
We have entered a period where most markets are likely to be volatile and picking the right investments will be crucial. This is where a fund of funds approach wins over most buy and hold strategies as the fund manger keeps his assets in the best funds and reviews his selection regularly.
The strategy of these funds is:
- Extensive analysis is carried out regularly of all the regions of the world. The best performing regions are selected and the best funds in those regions are analysed. Regular changes are made to ensure your money is in the best performing funds in the regions that are currently showing good growth. Sensible diversification is implemented to ensure that your funds are not over exposed to any particular asset or region.
- The performance of the selected funds is monitored constantly. The investments are rebalanced to ensure there is no over exposure to any one market sector
- Criteria are set in advance for selling a fund,
some use a stop loss, so that if the price drops, the investment is switched out and put into a fixed deposit or bond fund. After the market moves up by a predetermined amount, the investment is switched back into the fund. Failing this, it is switched into another performing fund.
- Because the underlying assets of a fund of funds are other funds, rather than the asset itself (shares metals, financial instruments etc), it has more liquidity. Most underlying funds keep a cash reserve and so when the fund of funds wants to sell, they can be paid out from this cash reserve without necessarily causing the underlying fund manager to sell assets.
- Funds of funds have no allegiance to any market sector and so for example, if the whole stock market world-wide is falling, they can go heavily into cash or bonds. A normal mutual fund cannot do this and has to remain invested.
The benefits of this strategy are:
- Risk is reduced as the impact of regional and cyclical downturns on your investment are minimised.
- Growth is maximised as this strategy enables the world‘s highest yield funds to be used, with limited downside risk.
- You do not have to worry about reallocating your selection of funds as markets change. You can simply select the fund of funds according to the risk level at which you feel comfortable.
Take a look for yourself, the funds of funds we have selected have out-performed their market sectors and their peers.
Many of these funds are based in the Isle of Man which has been given a AAA rating by Standard & Poors.
* indicates a Friends Provident International Ltd Mirror Fund