SPOT THE DOG report has recently been published

The great news for our investment clients is that ‘yet again’ we are holding in our investment portfolios only Pedigree Picks – ZERO Dog Funds.

We (naturally) are advocates of investment portfolio construction delivering to an investor’s expectation and understanding – which is why we provide a large amount of communication, hopefully in a way to inform and educate our clients and investment consumers as to the ‘facts and detail’ of our advice results and investor outcomes.

For those investors who deployed capital from April to November 2020 (prior to the Pfizer vaccine news being released), the results have been truly exceptional (the market recovery has been much faster than expected).  You may want to read again the article – Wall Street v Main Street – The Widening Economic & Investment Market GAP: Click here to read

The article seems like an ‘age ago’ but the message remains the same.

Our views are that a transparent reporting process, enabling the understanding of data, produces the best relationships and long term outcomes for our clients.

We are passionate about ‘adding value’ and appraising this value against what we would ‘buy’ as a service ourselves.  If I wouldn’t engage in the service I wouldn’t present it to the market – it’s as simple as that!

The recently published report (Spot the Dog) enables an opportunity to provide further contexts in relation to the report produced.  It is important that investors understand that the construction of portfolios is about building suitable investment outcomes where ‘Risks’ of the asset allocation should be understood – it is the professionals’ responsibility to explain and deliver suitable outcomes so, in the simplest format a 100% equity based investment (100% Risk Asset) will be expected to suffer a larger drawdown in value if markets fall relative to a more balanced portfolio that holds 50% in equities.

Sector diversity and exposure to the underlying asset in the various funds produces the ‘value add’ or ‘Alpha’ where we look to use the leading funds in sectors that build and make up the portfolios.

Getting ‘under the bonnet’ of these funds is essential, which is the domain of the professional adviser.  I have yet to see a retail investor carry out this process to a professional level – and we see many portfolios – over many years.

Our clients receive a large amount of technical information, along with product detail, which we know can be an imposition for busy people to read (we know who opens and reads the articles as the communication is tracked in a GDPR way), so we remind avid readers that the vast amount of articles and communications are available on an historical basis on our blog.  Visit our blogs to ‘look up’ various articles sent as required by clicking here.

We very much love reports like ‘Spot the Dog’ as the outcome of our diligent research and analysis becomes transparently evident.  We know that many retail investors continue to hold ‘Dog funds’ or Zombie products that exist on the edge of absolute death, so we do all we can to highlight the need for ongoing professional review.

Spot the Dog has been published for over a quarter of a century and provides clarity to the changing fortunes of asset managers.  It provides an interesting read.

We very much view this research as evidence that an investor/client focused process is essential to producing the best outcomes for investors.

We pride ourselves on consistency and providing suitable results for our clients (the best outcomes at the Bestpricefs)

UK All Companies

We hold Zero Dog funds.

Pedigree picks included in our models:
LF Lindsell Train UK Equity
TB Evenlode Income

We would certainly add a number of other additional funds to the sector which had not been included in the Spot the Dog report – such as the leading UK Equity fund (that we hold) over 1, 3 and 5 years MI Chelverton UK Equity Growth (Morningstar 5 star rated), along with Baillie Gifford’s UK Equity Alpha and Buffetology fund.  So we could question the reason why the three funds included in our investment models are not pedigree picks in the ‘Spot the Dog’ report?!

UK Equity Income

We hold Zero ‘Dog funds’.

Pedigree picks included in our models:
Trojan Income
Threadneedle UK Equity Income

We would also take the view that Unicorn UK Income would be a pedigree pick.

European Equity

We hold Zero ‘Dog funds’.

Pedigree picks included in our models:
Barings Europe Select

We would also say that Baillie Gifford European at 2nd over 1 year, 3 years and 5 years would merit being a pedigree pick, along with Man GLG Continental European Growth, Premier Milton European Opportunities at 3rd over 1 year and 1st over 3 and 5 years are pedigree, along with Allianz Continental European and Jupiter European are pedigree picks – which we hold.

Asia/Japan

We decided to allocate our Asian exposure to Veritas, Baillie Gifford, along with a couple of Asia Specialists – rather than Japan and China – which has proved to be a great decision.

We hold no Dog funds therefore.

North American

We hold Zero Dog funds in this sector – based upon the benchmark set by ‘Spot the Dog’.

Pedigree picks included in our models:
Natixis Loomis Sayles UK Equity Leaders
Morgan Stanley US Advantage

It is somewhat confusing why Baillie Gifford’s American fund is not included as it is 1st over 1, 3 and 5 years and 5 star rated by Morningstar.

Legg Mason IF Martin Currie US Unconstrained, Franklin US Opportunities and T Rowe Price US Smaller Companies Equity are also high quality funds and based upon quality we would certainly state that the funds should be Pedigree picks.

Global Emerging Markets

We hold Zero Dog funds in this sector.

We like the 3 funds selected by Spot the Dog as Pedigree picks – but currently prefer the three 5 star Morningstar funds we hold within our investment (risk adjusted) models.

Global Funds

We regard this sector as Global Specialists.  We hold Zero Dog funds in this sector.

We hold 3 of the funds held in the Spot the Dog Global Funds sector.

We additionally  hold a number of Specialist funds such as Baillie Gifford’s Positive Change – which is 3rd over 1 year and 1st over 3 years in the sector and Baillie Gifford’s Discovery which is 2nd over 1 year, 2nd over 3 years and 1st over 5 years.

So, not including the leading funds over 1, 3 and 5 years is somewhat confusing.  We hold these funds, along with other exceptional funds that our investors will know – within their documentation.

ESG/Sustainable Investing

We are working on building a portfolio of leading ESG/Sustainable/Ethical investment funds at low cost.

We had populated our Risk Adjusted portfolios with a number of quality ESG funds.  We now see the need and demand for a specific portfolio to be constructed.

We very much want to be driving the ESG/Sustainability investment portfolio story to the retail investor.

If you have questions or wish to invest in a portfolio of assets that focus and are compliant with ESG investing at low cost – simply get in touch.

Great News

Against the backdrop of the pandemic, our results have been exceptional by any measurement for our clients.  We will shortly provide performance data so investors can see for themselves how our portfolios have performed, which is extremely pleasing.

One Stop Financial Shop

We remain very much ‘hard at work’ building the One Stop financial Shop – which we see as the future of Distribution – trusted by our clients to deliver expert consultancy and product transactions at a value price point.

We trust this summary provides benefit to our clients and readers, prompting action.  Simply get in touch as advice is required.

Very Best Wishes.

Richard and the Best Price FS Team