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Expat Investor : April 2008
Online Brokerage for Offshore Investors • Trade Forex, Futures, CFD’s and Shares offshore • European, North American & Asian Stock Exchanges • Backed by TD Waterhouse and Fortis www.internaxx.lu Tel: (+352) 2603 2003 Y o u r I n t e r n a t i o n a l O n l i n e B r o k e r i n L u x e m b o u r g Internaxx Bank S.A., 46a avenue J.-F. Kennedy, L-2958 Luxembourg, R.C. B 78729. their assets across a broad range of asset classes and geographies. RBC Wealth Management is committed to personal relationships but also believes that no one person or company can be an expert in all markets at all times and so, five years ago, introduced an Open Architecture approach to portfolio management called Global Investment Solutions (GIS). To some, Open Architecture means using a Fund of Funds and spreading assets across 50–60 different managers, but the GIS philosophy is to know a fewer number of managers much more intimately. World class managers are selected and monitored via a rigorous qualitative process in each of the major asset classes, including alternative investments, and we “manage the managers” to ensure an optimal portfolio blend for our clients. GIS is a service not a product and, as such, clients retain direct access to their RBC Portfolio Manager, who fully understands PORTFOLIO MANAGEMENT April 2008 ? EXPAT INVESTOR 7 Fast Facts 44002 their needs and requirements. Our proprietary client discovery tools will ascertain the client’s objectives and risk tolerance and suggest an idealised asset allocation that is the starting point for further discussion. Once agreed, the Portfolio Manager will use this information to construct the client’s portfolio using the various building blocks managed by our external advisors. This methodology produces a diversified and yet focused portfolio that allows RBC to deliver two key requirements to the client: excellent service and solid performance. The strength of the offering lies in its adaptability. Depending upon portfolio size and tax requirements, portfolios can be constructed from either Funds or segregated models and offered in multiple currencies and the proposition is offered both onshore and offshore. In all cases, RBC retains custody and control of the assets allowing for consolidated performance reporting. Normally, for private clients, access to these world class managers and their institutional approach to money management would either be unobtainable or very expensive. The RBC Discretionary Investment Management solution is able to provide this access whilst retaining the benefits of a direct client relationship – all at a fair cost. The very best of both worlds. C HRIS S TEAD Head of Discretionary Portfolio Management, Standard Bank In today’s financial world the range, scope and complexity of available investment solutions is increasing rapidly. Additionally, clients themselves are quickly becoming far more knowledgeable in their search of suitable investment solutions. As such, they require, demand even, higher standards of proactive service and flexibility from their asset managers and investment advisors. In recognition of this, our Jersey-based Private Client Asset Management team, which comprises 13 portfolio managers and includes five directors with longstanding experience in managing assets for an international base of private and intermediary clients, offers an extremely personal, bespoke and client focused service. At the heart of their approach is the steadfast understanding that asset allocation is the dominant driver of investment returns. As such, the team place a great deal of emphasis on achieving an asset allocation policy/strategy which best suits a client’s risk profile and investment objective, whether it be capital preservation, provision of income, capital growth or a mixture of all three. To ensure that the wide variety of client investment objectives are met, every client is allocated a lead Portfolio Manager who has in- depth experience in understanding client’s investment goals and in delivering investment strategies that meet their individual requirements. These range from Absolute Return, Global Income and Global Conservative at the lower end of the risk spectrum to Global Balanced, Global Growth and Global Equity towards the higher end. Continuity of manager and close communication are also viewed as being vital in developing long-term client relationships and are key components to the delivery Continued on page 8 Growth or income? Setting up a goal for your investments means knowing whether you want growth or income from your money. Growth Investors who are concerned with building up long-term investments will be aiming towards securing capital growth. This is explained simply by making an investment at today’s value of £1,000 and expecting that investment’s intrinsic value to have risen appreciably over a period of time. In order to obtain real capital growth, that value must increase over and above the annual rises in inflation. Investing in the rising value of stocks and shares is the route to securing capital growth. To be is necessary. Given that even the most promising companies can falter and share prices can plummet overnight, spreading investment risk through collective funds which are designed to achieve capital growth can be essential for a successful outcome. Income Achieving an income from investments is a goal investors chiefly have for their retirement. As retirement approaches it is essential to achieve the right balance between good returns and a safe home for capital. Investors look towards investing any capital taken as a lump sum on retirement so they may live off the income derived from it. When choosing between the investments, providing this type of income, investors must be comfortable that they will produce a high and consistent return which will rise in line with inflation. To achieve this, the assets invested in must be capable of yielding annual growth. Equally, the security of such investments will be just as important. Now is not the time for income- seekers to invest in shares of companies whose business carries any element of risk. There are many collective funds dedicated to achieving income. When looking at the potential for an income from funds, investors should concentrate on those paying out a good and rising half-yearly dividend. The goal is for this dividend to be greater than that which would be earned from a bank or building society account’s interest rates over the same period. successful investors must consider those funds investing in promising companies which are forecast to do well and whose share price is expected to rise. There is an inherent risk in such investments as to achieve capital growth a more aggressive style of investment management
May June 2008