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What a Difference a Year – or Seven can Make!

Published 28/12/2020

The past six months have been extraordinary times for all our clients. Our standard mantra – that risk is necessary to beat inflation and create genuine scope for real income – has never been truer than now.

With Bank of England Base Rates at 0.1% and average inflation in excess of 2%, certainly for the over 50s, investment growth is imperative. Many people see cash as risk free, and in one sense it is. However, due to inflation, if you leave money in cash for 12 months, it will buy less goods and services in a year’s time compared to now.

Every option has uncertainty and we contend that measured exposure to a range of asset classes is vital, while bearing in mind the investor’s attitude to risk.

This is why seven years ago we introduced our own range of risk graded funds, managed by JM Finn. We wanted a low risk range of flexible portfolios, using as many assets classes as possible, a strong working rapport with the key manager, a blend of passive and actively managed funds, automated rebalancing and instant online control.

We like to think we have achieved our goals and what better time to illustrate this than now when markets, as a whole, are under such pressure.

JM Finn – Lawrence Miller Growth Portfolios

NB Launch Date: 1 January, 2013.

These figures do not include the effect of charges and costs and assume investment on 1 January 2013, the day the funds were launched.

What we’re pleased about is the correlation between risk and reward. The greater the risk – the greater the reward over the longer term. The fact that £300,000 has turned into £594,900 over 7 years and 9 months is excellent.

This meant that even for cautious investors, their £300,000 turned into £500,000 and would have dropped in value in the 12 months to the end of September by only 2.75%. The FTSE 100, by contrast, had fallen by more than 20%. This is the great prize: Low risk, excellent growth, huge flexibility and instant access at all times.

Buoyed with this success and in response to zero interest rates, we are now launching two more portfolios that will offer even less equity content, even lower risk but all the same features and benefits. We have been running these portfolios in theory now for 4 years and the results are below:

JM Finn – Lawrence Miller Cash Beater Portfolios

 

If you’d had a Cash ISA and it generated more than 0.5% over this period of time, you’d have been in the minority – and that Cash ISA will now be worth £51,007.

Over the same period of time, £50,000 in JM Finn 2 would now be worth £59,600. What’s more, the above figures include the effect of platform and fund manager charges.

Cash Beaters will be available in the form of pension funds, ISA and GIAs.

Please contact us, if you would like more information.

By making an investment, your capital is at risk. The value of your investment depends on market fluctuations outside of our control and you may get back less than you invest. Past performance is no indicator of future performance.

All the investment portfolios detailed above put your capital at risk.  Please note that Cash Beater Portfolios are not cash or cash like investment portfolios and should not be considered if you want a cash based investment as your capital will be at risk within these portfolios.