Investing in the stock market is very straightforward these days. UK listed shares may be bought through any number of online brokers.
But investing in single stocks is a risky business because you are putting all of your eggs in one basket. There is a long list of “too big to fail” companies that have gone bust!
So you buy multiple shares in different sectors – but when should you sell? When should you rotate? And how do you gain overseas exposure? And what about all the paperwork? And how much time does it take?
A straightforward solution is to invest instead in collective investment funds. These pool together many investors’ capital to provide a broad spread of risk, economies of scale and the benefits of professional management. There are many different types of collective investment funds and they invest in a wide range of different assets from fixed interest securities to property, shares and commodities. There are thousands of funds from which to choose.
As the small print always states, please remember that the value of collective investment funds may fall as well as rise. Past performance data is useful for comparison purposes but is not necessarily a guide to the future.
HDA is able to construct a portfolio of collective investment funds tailored to your requirements and your views on risk. Our portfolios are available for direct investments, ISAs and pensions.
The HDA research team analyses thousands of collective investment funds on an ongoing basis. It completes detailed due diligence on those shortlisted and interviews individual fund managers to grill them on their investment style and approach.
Unlike many companies which focus on past performance or fund ratings, the HDA research team looks in granular detail at the behavioural bias of fund managers and the actual drivers of performance within a fund. By doing this they can establish how a fund is likely to perform in different market conditions and how this differs from other shortlisted funds in the same sector. Combining funds with specific “behaviours” is a key element of our risk-driven process.
We do not try to guess what markets will do tomorrow but we do have a good idea of how the funds we choose will behave in whatever market conditions we may face.
For further information please get in touch.