Private client portfolios managed on a
cautious mandate by UK wealth managers have recovered the losses of
the financial crisis, according to research.
Figures produced by Asset Risk Consultants (ARC) to the end
of December 2009 showed the average sterling private client
portfolio managed on a cautious mandate returned to early 2008
levels in September. The average balanced portfolio was 1 percent
down on the start of 2008, though not all clients will have
benefited from the recovery in the final three quarters of
2009.
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“Some clients went through a process of
de-risking their portfolios during the credit crisis in the fourth
quarter of 2008 and first quarter of 2009,” said Sanna-Liisa
Valtanen, director of investment consulting at ARC.
“They sold out of equities, and thus, when the
markets turned in early March, did not have the same equity
exposure as they did going into the crisis. In some cases the
decision was driven by the investment managers, in others it was
the directed by the clients.”
She added there was an inflection point in May and June where
risk profiles inverted and equity risk portfolios went from being
the worst performing investment class to the best.
ARCs’ Private Client Indices are based on a survey of 42
investment managers. None of the four investment styles, cautious,
balanced, steady growth or equity risk outperformed cash from the
start of 2008.
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