INVESTMENTS

Building an Investment Portfolio

Today there are a bewildering range of savings and investment vehicles and options available to the investor. Building an investment portfolio must take into account tax opportunities and implications, attitude to risk and reward and balancing it to the need for income, growth or both.

Following a detailed personal review of your current financial position, aspirations and objectives, we will assess all of the above factors with you before making recommendations for your asset portfolio. Wealth creation and management is an ongoing process and we will look to meet regularly to ensure the best chance of your objectives being met.

Unit Trusts

Unit trusts are a popular investment vehicle today, they are 'open ended collective investments' which put the cash of many investors into one 'pooled' fund. This system allows investors to invest "collectively" which has the benefits of spreading and reducing risk and keeping costs under control. Unit trusts allow you to invest in the stock market but enable you to spread your risk and benefit from expert investment management.

Open-ended Investment Companies (OEICs)

OEICs are often referred to as the modern day and flexible equivalent of the unit trust. They combine the elements of unit trusts and Investment trusts enabling you to pool your investments along with other investors. This helps to spread the risk and enables you to take advantage of the skills of a professional managing the fund.

Investment Trusts

An investment trust is simply a company that has been set up to invest in shares of other companies. By buying shares in an investment company, the investor is in effect spreading the risk that would normally by associated with a single share investment because the value of the Investment Company's shares are directly related to the spread of investments it is making.

New Individual Savings Accounts (NISAs)

NISAs are available to all UK residents over 16 years of age. They benefit all taxpayers, especially those paying the higher rate. They are however, not quite as easy to understand as they should be. But fortunately we do, and can explain the different options available.

Discretionary Fund Management (DFM)

DFM offers a professional investment service where they take responsibility for the investments in a client's portfolio in order to meet their specified objectives, without the need for the client's approval.

DFM provides:

• an individually constructed portfolio designed to match your specific requirements and attitude to risk
• the flexibility to meet any future changes in your circumstances
• access to extensive research capabilities and resources
• active fund management on a day-to-day basis without the need to involve you
• exposure to some assets and shares you simply could not access through direct investment yourself
• where available and appropriate, collective investments purchased at a reduced cost using 'institutional' terms
• a high level of personal service
• access to a professional investment manager who is available to meet with you and discuss your investment needs, both initially and on an ongoing basis
• a disciplined investment process, with performance managed against agreed benchmarks and monitored by us
• the back-up of a dedicated investment research team to support the portfolio manager

Government Gilts & Corporate Bonds

Government backed stock, known as 'Gilts' are loans made to the Government by in effect the investors. Much of the national debt is comprised of Government Gilts, so when the Government needs to 'borrow' more, it simply issues a new Gilt. Gilts provide income derived from interest payments and a final redemption. Inflation erodes away at the true value of the Gilts redemption, whilst interest rates will make the Gilts income appear more or less attractive. Broadly speaking when interest rates rise the value of the Gilt will fall and vice versa. Many professional investors and fund managers invest part of their portfolio in Gilts because Gilts can help them to spread risk and/or provide income.

Corporate Bonds are similar to Gilts, and work in much the same way, however Corporate Bonds, as the name suggests, are issued by multinational companies as opposed to Governments. They do this as a cheaper form of borrowing than a bank loan and often offer better returns than Government Gilts.