Our wealth management approach Our investment philosophy Our investment process

Our investment philosophy

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Key Investment Principles

1. Client Individuality

We accept and embrace the fact that each client has a unique set of personal circumstances, aspirations and a particular risk tolerance profile. Our philosophy is to implement solutions appropriate to individual contexts.

2. Process Driven Solutions

Our solutions are based on an in depth investment process whereby each portfolio building block is researched and selected to provide optimum performance within clearly defined and acceptable parameters, such as risk, time and performance benchmarks.

3. Asset Allocation

We believe that overall portfolio returns are primarily driven by asset allocation (i.e. the portfolio weighting to equities, bonds, cash, currencies and alternative asset classes).

4. The 'Active' vs 'Passive' Debate

Much of the outsourced research is focused on identifying long-term winning asset managers who have delivered enhanced returns when compared against their benchmarks, as well as having provided better risk and volatility metrics. However, we also recommend that the selection of active managers be complemented with passive funds which offer a credible low cost building-block alternative within our portfolio construction methodology.

Futurity’s philosophy is, where appropriate, to intelligently combine the two seemingly opposed approaches so as to reduce overall portfolio costs via passive funds, whilst employing active managers who have mandated flexibility to take judicious action in terms of stock-picking and asset allocation during times of market turmoil.

5. We are not individual tock-pickers

Futurity selects its managers based on criteria such as their resources and capabilities, as well as their performance track record. Our research thus focuses on manager / product selection and monitoring, while individual stock selection decisions are left to the underlying managers.

6. Offshore Investment

We believe that the decision to invest offshore should primarily be driven by the principle of risk diversification, as well as from the greater opportunity set that exists outside the South African market. However, due to the unpredictability of currency movements, we strongly advocate that the allocation of offshore assets be set at a prudent level, ensuring there is no future mismatch of currency-based assets to currency-based liabilities.

7. Diversification

Our portfolio construction, at overall portfolio and individual product levels, incorporates building block selection which is likely to display uncorrelated performance at any given point in time, without compromising returns over the long-term. This philosophy proved to be prudent and effective during recent periods of market turmoil such as the Global Financial Crisis and the European Sovereign Debt Crisis.

8. Conclusion

Our investment philosophy is premised on our track record which demonstrates that in-depth research and appropriate portfolio construction result in optimal long-term outcomes.

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Futurity Wealth Management (Pty) Ltd | Registration No. (2000/081629/07) - Authorised Financial Services Provider - #811

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