A fresh approach to Discretionary Investment Management October 2020 - LGT - VALUES WORTH SHARING - LGT Vestra
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A fresh approach to
Discretionary Investment Management
October 2020
in conjunction with
LGT – VALUES WORTH SHARING
Table of contents Pages 3 - 4 An introduction to LGT Vestra LLP, and the LGT Group Pages 5 – 9 How LGT Vestra manage investments Pages 10 - 14 Introducing the Blended Model Portfolios Pages 15 - 17 Active vs passive investing Pages 18 – 25 X-Ray, deep dive analysis and back testing Page 26- 27 LGT charges and portfolio costings Pages 28 - 29 Summary and Awards
LGT Vestra LLP – background and history
A unique history of a successful business in a challenging post crisis environment:
Formed as a limited liability partnership in 2007
£15.7bn in assets under management as at the end of August 2020
Over 367 staff of which 58 are working partners as at end of August 2020
A wealth management service designed for private clients, trustees, charities and financial
intermediaries
Unbiased and a ‘whole of market’ approach
A well informed investment process, with continual investment into a high quality team
Backed by the LGT Group (Moody's Aa2, S&P A+ )
Authorised and regulated by the Financial Conduct Authority as a Discretionary Investment Manager
3
LGT Group - Global access with a boutique approach
Our clients are increasingly global. We support and simplify the arrangements of multi-national and
multi-generational wealth. We are a part of the LGT Group, which remains the largest family-owned
Private Banking and Asset Management group in the world.
LGT Group Why LGT Group
Offices: 21 worldwide Financial stability
Employees: 3,100 staff Long-term perspective
Assets: CHF 227.9 billion as at 30/06/20 Conservative balance sheet
Ownership: The Princely House of Liechtenstein Independence
Rating: Moody's Aa2, S&P A+
Global locations
Australia Japan
Austria Jersey
Bahrain Liechtenstein
China Singapore
Dubai Switzerland
Hong Kong Thailand
Ireland United Kingdom
USA
4
LGT Vestra's core Model Portfolio Service (MPS) overview
The MPS is a discretionary investment service
comprising of six diversified portfolios; meeting
a range of objectives and risk profiles
A centralised investment process which
combines the experience of our investment
managers with the in-depth knowledge of our
dedicated research team
Accessible on a wide range of third party
platforms
C. £4bn AUM
10 year track record
Award winning:
Citywire Investment Management Awards 2018
'Best Cautious Strategy' win 'Best Large DFM' win
Citywire Investment Management Awards 2017
'Best Balanced Strategy' win
5
How we make decisions
We offer a blend of top-down asset allocation and bottom-up security selection.
Investment
Trust
Committee
Non-
standard Equity
Investments Committee
Committee Investment Your
Committee portfolio
Authorised Fixed
Collectives Income
Committee Committee
6
Our investment process
Investment Committee
Assess macro economic outlook
Set asset allocation views
Propose biases for portfolios
Publish idealised portfolio
template
Our research
Your Investment Manager
Helps to populate the portfolio
Asset allocation to reflect the
5 teams covering equities, fixed
Your needs Investment Committee’s view
income, authorised collectives,
Your needs – target performance
non-standard investments and
Your needs and risk restrictions
investment trusts
Review and risk
review process
Your portfolio
Your portfolio
Reporting to you
7
Core MPS performance
Q2 2020 ARC MIR report – LGT Vestra MPS Balanced
Source: Asset Risk Consultants. ARC deduct 1% across the peer group from the figures submitted for management fees.
8
Quarterly Investment Committee meetings
in conjunction with Castle Investment Solutions
A blend of top-down asset Seamlessly executed and
allocation and bottom-up constantly reviewed and
investment selection implemented
9
A blended approach to create a unified
range of portfolios
Unique set of portfolios
Aligned to Risk Profile Output
Highly competitive cost
Strong risk management
Passively Actively
Managed Managed
(50%) (50%)
Standard Life, James Hay & 7IM
By combining LGT Vestra's experience in managing model portfolios and risk management tools, we have produced a
set of portfolios which both stand out and are truly unique for Vision Financial Planning clients.
10Blended Model Portfolio Service (MPS) overview
A discretionary investment service comprising of five diversified portfolios, meeting a range of
objectives and risk profiles.
Target*
(over five years)
Annualised Annualised
Volatility % Return %
Conservative 2 to 4.75 3 to 4.5
Cautious 4 to 7 4.5 to 6
Balanced 5 to 9 5.2 to 7.5
Balanced + 8 to 13 6 to 8
Adventurous 10 to 16 7 to 10
* Where targets are given, these are for indication purposes only; the actual figures achieved could be
more or less than the ranges given.
The return and volatility targets are an average over a five-year time horizon.
11Blended Portfolio (Risk 3 – Low Risk)
Fixed Income 46.0% Global 11.0%
Vanguard US Govt Bond Index 8.0% Fundsmith 2.0%
CG Dollar Hedged 8.0% FP WHEB Sustainability 4.0%
Dimensional Inflation Linked 7.0% Stewart Investors Worldwide Sustainability 3.0%
Vanguard UK Short-Term IG Bond 7.0% Impax Environmental Markets 2.0%
Threadneedle UK Social Bond 6.0% Thematic 0.0%
Vanguard Global Bond Index 5.0% Alternatives 16.0%
Rathbone Ethical Bond 5.0% Absolute Return 16.0%
Total Equity 24.0% Threadneedle Credit Opportunities 6.0%
UK Equities 9.0% Troy Trojan 4.0%
L&G FTSE UK 100 Index 7.0% BNY Mellon Sustainable Real Return 6.0%
L&G UK Mid Cap Index 2.0% Property/Commodities 0.0%
International Equities 15.0% Cash 14.0%
Europe 0.0% BlackRock Cash 11.0%
North America 4.0% Cash – GBP 3.0%
L&G US Index 4.0% Total 100%
Japan 0.0%
Asia Pacific ex Japan 0.0%
Emerging Markets 0.0%
Portfolio is shown as at 20.09.2020 and is for illustration purposes only.
12Blended Portfolio (Risk 5 - Medium)
Fixed Income 24.0% Global 17.0%
Vanguard US Govt Bond Index 3.0% Fundsmith 2.0%
CG Dollar Hedged 4.0% FP WHEB Sustainability 3.0%
Dimensional Inflation Linked 2.0% Stewart Investors Worldwide Sustain 4.0%
Vanguard UK Short-Term IG Bond 3.0% Impax Environmental Markets 4.0%
Threadneedle UK Social Bond 5.0% Vanguard Global Small-Cap Index 2.0%
Vanguard Global Bond Index 4.0% Vanguard FTSE Global All Cap Index 2.0%
Rathbone Ethical Bond 3.0% Thematic 0.0%
Total Equity 57.0% Alternatives 7.0%
UK Equities 23.0% Absolute Return 7.0%
L&G FTSE UK 100 Index 9.0% Threadneedle Credit Opportunities 3.0%
Schroder Income 3.0% BNY Mellon Sus Real Return 4.0%
CF Lindsell Train Uk Equity 4.0% Property/Commodities 0.0%
L&G UK Mid Cap Index 4.0% Cash 12.0%
Liontrust Sust Fut UK Growth 3.0% BlackRock Cash 10.0%
International Equities 34.0% Cash - GBP 2.0%
Europe 0.0% Total 100%
North America 8.0%
L&G US Index 8.0%
Japan 3.0%
L&G Japan Index C Acc 3.0%
Asia Pacific ex Japan 4.0%
Stewart Investors Asia Pacific Leaders 2.0%
L&G Pacific Index 2.0%
Emerging Markets 2.0%
L&G Global Emerging Markets Index 2.0%
Portfolio is shown as at 20.09.2020 and is for illustration purposes only.
13Blended Portfolio (Risk 7 – High Risk)
Fixed Income 7% Global 28%
Vanguard US Govt Bond Index 3% Fundsmith 3%
Threadneedle UK Social Bd Z Acc£ 4% FP WHEB Sustainability C 4%
91% Stewart Investors Wldwd Sustbl B Acc GBP 6%
Total Equity
28% Impax Environmental Mkts Ire X GBP Acc 5%
UK Equities
Vanguard Glbl Small-Cap Idx GBP Acc 4%
L&G FTSE UK 100 Index 10%
Vanguard FTSE Glb All Cap Idx Inv A £Acc 6%
Schroder Income 5%
Thematic 7%
CF Lindsell Train Uk Equity 4%
Polar Capital Global Insurance Fund 2%
L&G UK Mid Cap Index C Acc 6%
L&G Tech 5%
Liontrust Sust Fut UK Gr 2 Net Acc 3%
Alternatives 0%
International Equities 63%
Absolute Return 0%
Europe 0% 0%
Property/Commodities
North America 9% 0%
Multi -Asset
L&G US Index 9% Cash 2.0%
Japan 7% Cash - GBP 2%
L&G Japan Index C Acc 7% Total 100%
Asia Pacific ex Japan 9%
Stewart Investors Asia Pacific Leaders 4%
L&G Pacific Index C Acc 5%
Emerging Markets 3%
L&G Global Emerging Markets Index C Acc 3%
Portfolio is shown as at 20.09.2020 and is for illustration purposes only.
14Active vs passive investing
We are firm believers that asset allocation drives around 90% of returns but the below proves that
there are opportunistic pockets of alpha…
LGT Vestra Model Portfolio - GBP
Source: LGT Vestra
15Exhibit A
Active vs passive investing – consider global equities
Source: FE Analytics
16Exhibit A
Active vs passive investing – consider fixed interest
Source: Morningstar
17X-Ray, deep dive analysis and backtesting
We monitor portfolio risk on an ongoing basis using a range of external and proprietary tools, this forms
part of the monthly investment committee meeting discussions.
Contribution to risk of underlying holdings Distribution of returns Morningstar holdings-based style trail
Geographic exposure of underlying holdings Fund liquidity analysis Stress-test analysis of volatility
parameters
20
10
0
Lower Limit Upper Limit
18LGT Vestra fund liquidity analysis
Normal conditions
19LGT Vestra fund liquidity analysis
Stressed conditions
20Back testing the Blended Model Portfolios – 1 year picture to 20th
Sept 2020
Source: Morningstar
21Back testing the Blended Model Portfolios – 1 year
Source: Morningstar
22Back testing the Blended Model Portfolios – 3 years
Source: Morningstar
23Back testing the Blended Model Portfolios – 5 years
Source: Morningstar
24Back testing the Blended Model Portfolios – numeric results
Source: Morningstar
25Costings – Blended Model Portfolios for Vision IFP Ltd
LGT Vestra Investment
Post MiFID
Management & custodian Castle due diligence
Portfolio OCF external ancillary Total cost Risk
charge (incl vat)- Discounted fee (inc vat)
costs
for VIFP
Blended Conservative 0.32% 0.08% 0.43% 0.24% 1.07%pa Vision Conservative – DT3
Blended Cautious 0.32% 0.07% 0.43% 0.24% 1.06%pa Vision Cautious – DT4
Blended Balanced 0.37% 0.05% 0.43% 0.24% 1.09%pa Vision Balanced – DT5
Blended Balanced Plus 0.36% 0.05% 0.43% 0.24% 1.08%pa Vision Balanced – DT6
Blended Adventurous 0.37% 0.05% 0.43% 0.24% 1.09%pa Vision Adventurous –DT7
LGT Vestra LLP will charge 0.15%pa + vat for its investment management service.
LGT Vestra LLP custodian charge is 0.25%pa (no vat).
The Castle Due Diligence fee is 0.20% + vat.
Total Cost for Balanced portfolio is 0.42% + 0.18% + 0.25% + 0.24% = 1.09%pa inclusive of vat.
Vision Advice fee to be added.
26Source: LGT Vestra
Summary
A unique set of model portfolios designed for clients of Vision Independent Financial Planning Ltd.
Delivered by LGT Vestra LLP, an investment management firm that has one of the best track records
in managing model portfolios.
Bringing about the best of active and passive investing.
Best of breed approach, delivering value for money.
28Dedicated Vision IFP Business Development Team
Phil Brewis Andy Tooker
Partner, Head of Strategic Partnership Business Development Director
+44(0)797 791 8117 +44(0)795 088 4031
phil.brewis@lgtvestra.com andrew.tooker@lgtvestra.com
Michael Moss
Ellie Furneaux
Partner, Lead Business Development
Business Development Manager
Director
+44 (0)7770 128323
+44(0)794 666 6973
ellie.furneaux@lgtvestra.com
michael.moss@lgtvestra.com
Alice Gerry Victoria Barber
Lead Business Development Director Business Development Director
+44(0)774 116 2188 +44(0)782 648 3034
alice.gerry@lgtvestra.com victoria.barber@lgtvestra.com
29Dedicated Vision IFP Investment Management Team
Bespoke Investment Managers:
Sanjay Rijhsinghani
Partner, Head of MPS Elliott O'Brien
+44 (0) 203 207 8060 Bespoke Investment Manager
sanjay.rijhsinghani@lgtvestra.com +44 (0)20 3207 8495
elliott.obrien@lgtvestra.com
Henry Wilson
Andrew Gaskell
Blended MPS Investment Manager
Bespoke/Tier One Investment Manager
+44 (0) 203 207 8484
+44 (0)20 3207 8010
henry.wilson@lgtvestra.com
andrew.gaskell@lgtvestra.com
Lucy Ritchie
Phoebe Stone
Bespoke Investment Manager
Partner, Head of Sustainable MPS
+44 (0)20 3207 8422
+44 (0)20 3207 8467
lucy.richie@lgtvestra.com
phoebe.stone@lgtvestra.com
30Awards
Winner of the Portfolio Adviser Wealth Manager Awards 2019 – Best Diversity Initiative
Winner of Citywire Investment Performance Awards 2018 – Best Cautious Strategy
Winner of Citywire Investment Performance Awards 2018 – Best Large Firm
PAM 50 Most Influential 2017 – David Scott, Chairman LGT Vestra
Winner of Citywire Investment Performance Awards 2017 – Best Balanced Strategy
Financial Times 1000: The complete list of Europe's fastest growing companies 2017
PAM 50 Most Influential 2016 – David Scott, Chairman LGT Vestra
PAM Awards 2015 – Commendation for Vestra Private Office – Total Wealth Solutions Provider for UHNWs
Winner of 2014 International Hedge Fund Award: Highly Recommended Wealth Management Firm of the Year
Listed in the London Stock Exchange’s list of the Top 1000 Companies to Inspire Britain
Winner of LondonlovesExcellence Awards 2013 – Business and Finance category
Winner of Wealth Adviser 2013 Best Wealth Manager for Growth Portfolios (UK)
PAM Awards 2012 – Winner - Growth Portfolios
PAM Awards 2012 – Finalist - Defensive Portfolios
PAM Awards 2012 – Finalist - Image and Reputation
PAM Awards 2011 – Finalist - Image and Reputation
Shortlisted Investment Team of the Year 2011, STEP Awards (Society of Trust and Estate Practitioners)
31Legal information
LGT Vestra LLP is authorised and regulated by the Financial Conduct Authority (FCA) in the United Kingdom. Our registration details are set out in the FCA Register: Firm
Reference No. 471048, www.fca.org.uk/register.
This document is for professional advisers only and should not be passed to Retail clients. It is for information only and should not be construed as advice or an offer,
invitation or solicitation to enter into any financial obligation, activity or promotion of any kind. Past performance is not an indication of future performance, capital is at
risk and the value of investments and the income derived from them may fluctuate and may be affected by exchange rate variations.
The information and opinions expressed herein are the views of LGT Vestra LLP and are based on current public information we believe to be reliable but we do not
represent that they are accurate or complete and should not be relied upon as such. Any information herein is given in good faith, but is subject to change without
notice. No liability is accepted whatsoever by LGT Vestra LLP, employees and associated companies for any direct or consequential loss arising from this document. This
document is not for distribution outside the European Economic area.
LGT Vestra LLP is a limited liability partnership registered in England & Wales. Registered Office: 14 Cornhill, London EC3V 3NR. Registration number OC 329392.
LGT Vestra LLP is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange
LGT Vestra (Jersey) Limited ("LGTVJL") is incorporated in Jersey and is regulated by the Jersey Financial Services Commission in the conduct of Investment Business and
Funds Service Business. Registration number: 102243; https://www.jerseyfsc.org/industry/regulated-entities , Registered office: 30-32 New Street, St Helier, Jersey, JE2
3TE.
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