The Research Team
Our funds research team is led by Stewart Smith. With over 7 years experience in
the Willis Owen Research team, Stewart leads the fund research programme and compiles
the selected funds and portfolios. He has a BA (Hons) degree in Financial Services,
as well as the Financial Planning Certificate. Here Stewart answers some questions about how the funds for the Portfolios are selected.
Q: How do you go about selecting funds for the three portfolios?
Our three Portfolios aim to meet the needs of different types of investors, but
the processes we use to select funds are essentially the same. We start by giving
funds an overall score based on a thorough analysis of the market. To do this we
use 8 different performance factors to help us identify funds that have demonstrated
consistent returns over a given period of time, under both rising and falling stock
market conditions. This helps us to pick out funds that have performed consistently
well under a variety of stock market conditions. We then look at the top scoring
funds in more detail, taking into account such things as; the amount of risk taken
by the fund managers, their experience and the investment processes they use, as
well as the level of support they get from investors.
Q: So how do you decide what combination of funds to use for each portfolio?
One of the main building blocks for any portfolio is to spread risk through diversification.
We look for funds where their patterns of returns complement each other so as to
smooth out the amount by which investors might see their capital fluctuate in value
both upwards and downwards. For example; in our Income and Balanced Portfolios we
aim to diversify risk by including funds that invest in bonds as well as funds that
invest in UK shares. Historically, the patterns of returns from these two types
of investment have not coincided. In our Global Opportunities Portfolio we aim to
spread risk by using funds that invest in different regions of the world’s stock
markets.