Our strategy is built around a relatively diverse and actively-managed portfolio designed to maximise the
potential returns over the longer term, yet minimise the investment risks consistent with a “cautious” attitude.
For clients such as Victor and Jean, there is a bias towards lower-risk, fixed-interest assets which form around 30 per cent of the asset mix, having been reduced from the initial 40 per cent to benefit from the end-of-year rally we experienced.
My recommendations are for a wide spread of equity investments, with a slight bias towards smaller companies and technology, with the aim of tapping into longer-term growth. Where possible, within the main asset groupings, I have sought to further diversify the portfolio by investment style, for example by including growth and value-focused funds.
It is also worth mentioning what I have not included in the portfolio. For example, little cash is currently held, due to prevailing low interest rates.
Likewise, there is little exposure to gilts which, despite their normal defensive attractions, may be vulnerable to profit-taking after a very strong run in recent years.
There is little exposure to Japan as the market remains difficult to call and, with an ageing population, we believe growth there will be low.
We have, however, added some European holdings as we believe the region may be past the worst.
• David Thomson is an IFA with VWM Wealth Investment