When we set up our multi-asset funds 10 years ago, we thought people would appreciate accountability and value reliability. Turns out we were onto something. Rathbones head of multi-asset investments David Coombs looks forward to the next decade.
10 more years of evolution
You’re crazy, they used to say 10 years ago. Why would anyone want a fund that aims for a set return above inflation or interest rates and a certain amount of risk? What about the 'lights'? Investors want to see them shot out!
We thought differently when we designed our multi-asset range a decade ago. It was a hard slog getting many people to understand us at first. Yet it turns out we were onto something by setting a concrete target for returns and risk that investors could measure us against. Investors were actually less inclined to “shoot the lights out” than many fund managers and advisers thought. Especially after the credit crunch and the huge market falls of 2007/08, investors craved certainty. People want investments that they can rely on to deliver the money they need to achieve their dreams. Mostly, these aren’t earthshattering aspirations: seeing their kids off to university knowing the cost is all accounted for; retiring in good time to the Dorset countryside for some much-earned rest and relaxation; perhaps buying a holiday home on the Continent. But to the people achieving these dreams, that is shooting the lights out.
Sometimes fund managers can focus so much on returns and volatility and stocks and bonds and yields that they forget that our job is simply a means to an end. This isn’t an intellectual game or an abstract challenge, this is real people’s money. We’re not the reason, we’re the method. And the best methods – the best tools – are the ones you can be sure of. It’s no good if something is exceptional one week and virtually unusable the next. You can’t plan a picnic with something like that, let alone your life.
It took a good few years, but now virtually everyone is following our lead. Now it’s not crazy to offer people a steady return, dampen the ups and downs of markets and let compounding do its work. Now, it’s a bit old hat and “the only sensible way to do things, of course”. This is undoubtedly a good thing for the investment industry and the people it serves.
There’s always more to do though. We’ve continued to reassess our strategies to ensure they give investors the best possible result. That includes constant reappraisal of our portfolios and how a complex world changes the interaction between assets. Over the past 10 years we’ve moved from portfolios of funds to investing directly in stocks, bonds and alternatives. We’ve cut costs considerably and refined the unique way we categorise investments. We’ve bolstered our team and boosted our communication with investors too. It’s imperative that we say what we mean and deliver on what we say. Transparency and reliability are crucial, always have been. And they will continue to be for the next 10 years that we spend helping our clients get the future they want.
Here’s to your future, whatever it may be.
It hasn’t always been easy going, but Rathbones’ multi-asset strategies have come a long way since they were first launched a decade ago, and David Coombs, our Head of Multi-Asset Investments, takes the opportunity of this 10-year anniversary to reflect on that journey in his report 'Cracking on'.