Echo model portfolio - medium-term growth, higher risk

Growth: Medium term
Risk: Higher
Last updated: April 12, 2018

Who is it for

Investors looking to grow their capital over at least ten to fifteen years, who have other secure savings, and can afford to lose a significant portion of this capital under a worst case scenario.
Could be considered by investors wishing to accumulate a nest egg for grandchildren via a JISA.
Investors in their early fifties with adequate pension provision who want to make extra savings for their retirement in an ISA.

Portfolio breakdown

Ardevora Global Equity

Invests in undervalued companies globally, but is also able to ‘short’ shares that the managers believe will go down in value.

Seneca Global Income and Growth

Targets total return and is cautious in its asset allocation.

LF Miton UK Value Opportunities

Invests in UK companies of all sizes which its managers believe are undervalued and likely to produce superior capital growth.

SLI Global Smaller Companies

Provides exposure to faster growing smaller companies worldwide, including in the UK.

HSBC FTSE All Share Index Ret Acc

Tracks the performance of the FTSE All Share Index.

Old Mutual Global Equity

Highly diversified global fund that adopts a pragmatic and multi themed approach.

Veritas Asian

Manager Ezra Sun has generated strong performance over a number of years.

Why these funds were selected

At the base of the portfolio is a holding in HSBC FTSE All Share Index fund which provides investors with broad exposure to UK companies of all sizes and, being a passive fund, this also avoids the risk of choosing the wrong investment manager. CF Miton UK Value Opportunities aims to provide exposure to undervalued companies that produce strong growth, although we have reduced our holding because of a manager change. The largest part of the portfolio is invested in four global funds with different strategies to provide diversification and maximum scope for gains. Old Mutual Global Equity has a highly diversified portfolio with no style bias, and invests where the managers see prices rising. Ardevora Global Equity invests in undervalued companies globally, but is also able to ‘short’ shares that the managers believe will go down in value. Seneca Global Income & Growth Trust's shares trade at a manageable premium of 0.7%, targeting total return and has a cautious asset allocation , while SLI Global Smaller Companies has a superior performance profile to the F&C Global Smaller Companies trust it replaces. To top it off, there is a holding in Veritas Asian. It's arguably a riskier option but manager Ezra Sun has generated strong performance over a number of years and the fund has been a winner in our annual awards for the past two years.

Model Portfolio Echo performance 30 June 2018

  Total return (%) over:          
  1 mth 6 mths 1 year 3 yrs 5 yrs Inception  
  % % % % % %
Echo -0.3 5.5 14.3 35.9 56.3 85.6
FTSE All Share -0.2 1.7 9.0 31.6 52.8 86.1
FTSE UK Private Investor Growth 0.1 0.9 7.1 34.6 57.8 89.1

 

Timeline

2018

  • Sell
    F&C GLOBAL SMALLER COMPANIES
    January 2018
  • Buy
    SLI GLOBAL SMALLER COMPANIES
    January 2018

    The Standard Life Investments fund has a superior to performance profile to the F&C trust it replaces.

  • Sell
    RIT CAPITAL PARTNERS
    January 2018
  • Buy
    SENECA GLOBAL INCOME & GROWTH TRUST
    January 2018

    Seneca shares trade at a much more manageable premium of 0.7% compared to RIT Capital Partners.

2017

  • Sell
    CALEDONIA INVESTMENTS
    January 2017
  • Buy
    RIT CAPITAL PARTNERS
    January 2017

    We believe this trust will be a good core holding for the higher risk portfolios.

2016

  • Reduce
    CF MITON UK VALUE OPPORTUNITIES
    July 2016

    Holding reduced because of manager change.

  • Sell
    BLACKROCK WORLD MINING
    January 2016

    Trust's performance hit by failed investments and falling commodity prices.

  • Buy
    ARDEVORA GLOBAL EQUITY
    January 2016

    To gain from fund's global approach and the fact that it can invest for the long term but also sell stocks short in order to take advantage of falling values.