Exchange Traded Funds

We believe that strategic asset allocation decisions are the key to successful portfolio investment. Deciding which mix of investment asset classes is the most suitable in the light of your particular circumstances and how best to profit from the rich universe of opportunities in established and newer global investment asset classes, are the key investment decisions.

Wherever possible we implement our strategic asset allocation judgements using our distinctive "core and satellite" investment methodology using 'tracker funds'.

This means:

• Recognising that few investment managers consistently "beat the index", we use a new type of index tracker funds called Exchange Traded Funds (ETFs) exclusively as the  building blocks for your portfolio (except in the case of hedge fund investments). These  ETFs aim to deliver the same investment returns as their underlying asset class by  mirroring the composition of the relevant indices. This underpins performance and  contains costs.
• The 'core' of a portfolio will comprise a well-diversified selection of ETF investments  which mirrors the returns of a range of mainstream asset classes across the principal  markets and geographies.
• We add to this core a 'satellite' of investments in other, more specialised, ETFs which  are chosen to give exposure to more esoteric or dynamic market themes or geographies  and boost performance.
• The proportions of the core and satellite are typically 75% in core holdings and 25% in  satellite holdings.

This distinctive core and satellite methodology ensures that, at a contained cost, you can invest the bulk of the portfolio across a widely diversified range of conventional assets as well as gain some exposure to the fastest-growing and most exciting areas of world economic activity in a transparent and liquid way