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Monitoring the journey
Our monitoring approach can be summarised as:
Monitoring the strategy
The most significant driver of investment performance is the asset allocation. As such it is of paramount importance that in addition to monitoring the performance of a scheme’s investment managers relative to their benchmarks, the performance of a scheme’s asset allocation strategy should also be monitored relative to a scheme’s liabilities.
Monitoring the implementation
We offer regular monitoring reports to trustees. These include the performance of each investment manager, together with commentary on any structural change within the investment management company (e.g. the departure of a key manager, cash flows from the manager, changes in philosophy or ownership and any specific questions which we feel the trustees should raise with the investment manager). As part of this monitoring, triggers can be set to justify more detailed analysis of certain managers on a bespoke basis.
Our investment monitoring service is menu-based; depending on the trustees’ requirements, we could produce a report where the level of monitoring is appropriate for the portfolio structure. The greater the complexity, the higher the governance required.
Monitoring the markets
Alongside market analysis over the preceding period, we offer commentary on our views of different asset classes and how markets will evolve over the next 12-24 months.
An example of how this may be used is where trustees are looking to switch between assets in the future and wish to finesse the process. Alternatively, such information could be taken into account where there has been a fundamental mis-pricing in markets.
