Following the Absolute Return Strategy, our Portfolio Management Team has developed a list of recommended funds* that we believe will help your Portfolio attain an Absolute Return. Utilizing funds to gain exposure to equities is our preferred and recommended approach to building a portfolio. There are a number of advantages that a multi-manager approach offers -
It is possible to achieve a much broader diversification of assets by using funds in a portfolio. By investing in funds, not only will the portfolio contain exposure to a larger number of individual equity holdings, but it will also benefit from access to a range of investment styles and strategies e.g. value, growth and momentum investing. History has shown that investment styles have moved in and out of favor in an apparently random manner. By combining fund managers within a portfolio, each of whom deploys different styles and strategies to achieve their success, it is possible to further enhance the performance of the portfolio and reduce the risk.
To add on to the benefits of diversification, a portfolio of quality funds should exhibit lower volatility than a portfolio of similar direct investments and should thus enjoy smoother performance. The quality of the funds we recommend is ensured by our strict & structured fund selection criterion.
The use of funds also permits exposure to some markets or investment opportunities that would otherwise be impossible or difficult to achieve directly, for example, the emerging markets.
The multi-manager approach to investments is sometimes perceived to be more expensive than a portfolio of direct stocks. However, we do not believe that this is true.
Although most funds carry initial charges, but as substantial investors, Panoramic Holdings Ltd. is able to obtain a significant reduction in the fees, the benefits of which are passed on to our clients.
In addition, whilst each fund that we recommend has its own annual management charge, we strongly believe that it is the overall performance, the net of fees that is important. It would be expected that a portfolio of direct stocks would have a higher turnover than a portfolio of funds and therefore the increased costs associated with it, in terms of bid/offer spreads, commission and any government duties must be considered. Ultimately, the level of turnover within the portfolio will dictate which approach proves most costly. However, the superior performance that can be achieved by an individual fund manager can be viewed net of all fees and should more than compensate for any increased costs which may incur in the long run.
*For detailed information on our recommended funds and their past performance, kindly write to us at Contact@TA-Asia.com.
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