Investment philosophy and process

Our investment philosophy

We believe achieving consistently good portfolio performance requires a robust, repeatable and disciplined investment process. Our process is guided by following key beliefs:

We are active asset allocators

We believe optimising the balance between available asset classes is fundamental to producing better risk-adjusted returns. We invest a great deal of time and resource into the analysis of global economic and political events to help us determine how your portfolio should be positioned through all stages of the economic cycle. We will not try to ‘time’ markets or trade investments, preferring to adopt a fundamental approach to portfolio construction.

We believe in the principle of diversification

We diversify portfolios across asset class, geography, region, sector, fund manager and single security as a key way to manage the risks. We believe portfolios constructed in this way achieve better returns for less risk.

We avoid bias in our investment approach

We have no bias to the use of funds, single securities, active or passive investment strategies. Each approach is assessed on its merits and used in accordance with your needs.

How we build your portfolio

We begin by understanding your needs

We work with you to identify a set of achievable investment goals taking into account your investment time horizon, risk tolerance and return requirements. Together we will review all of your options and decide on the best way to achieve your objectives. For many clients, this part of the process includes consideration of your overall financial position that will help us to manage your portfolio efficiently.

Building your portfolio

We use a range of asset allocation strategies as a framework for constructing your portfolio. Our Chief Investment Officer (CIO) provides the macroeconomic framework that the Asset Allocation Committee refines, reviews and updates. These strategies are then optimised using our proprietary risk models to align projected returns with long-term client objectives.

Managing your portfolio

Your investment manager will regularly review your portfolio to ensure it reflects our latest views and remains on target to meet your personal objectives. Drawing on the support of our independent team of research analysts your portfolio will always be invested across the best range of investment options.

Our investment universe

There are a huge number of investment vehicles available. Analysing these options and identifying those we wish to use to build client portfolios is the responsibility of our highly qualified team of investment analysts. Their areas of expertise include:

1) Investment via funds

We predominantly, but not exclusively, invest in collective funds. These include unit trusts, open-ended investment companies (OEICs), exchange-traded funds and listed investment trusts. We firmly believe this best-of-breed approach delivers better returns for our clients. Funds offer:

Access to expertise

The most talented investors often manage funds and investing in collective investments is a means to access specialist expertise. The expertise required often differs between distinct financial markets and funds offer a way for investors to access institutional-quality talent.


Funds offer diversification which reduces stock-specific risk. They make it easier to achieve international diversification, which is crucial in a global economy.

Easy access to investment opportunities

Funds allow you to access investment strategies and asset classes that are not always available to private investors, such as hedge funds and emerging markets debt.

Tax advantages

Funds offer significant tax benefits. Unlike a private investor, fund managers can buy and sell shares without incurring Capital Gains Tax, so they can take profits on specific investment opportunities and reinvest them unencumbered by tax implications.

At Tilney we research a wide range of collective investment funds to identify those managers that consistently add value. Our research team follows a sophisticated due diligence process to manager selection, which includes a range of sophisticated analytical methods and tools. Our goal is to find the very best managers for our clients to invest with. Where we cannot identify active managers who consistently outperform their sector, we will also use investments that track the performance of a sector or index at lower cost such as index funds and exchange-traded funds.

 2) Direct investment in equities and bonds

For those clients with sufficient capital we offer the option of achieving their UK and international exposure to both equities and bonds through direct investment into the wide range of companies analysed by our research team. Investing directly into equity and fixed income securities reduces diversification and increases the stock-specific risk of your portfolio, but can offer advantages:

Allowing a more tailored investment portfolio

Direct investment into equities and bonds enables a tailored selection policy for individual client requirements. Examples of common requirements are exclusions of specific stocks or sectors for technical or ethical reasons, positive bias such as growth and recovery and also targeting of specific aspects of a market such as yield or, in the case of bonds, duration.

Lowering costs

Investing directly into single equities and bonds can reduce overall portfolio running costs.

Increased visibility

Direct exposure to equities and bonds has the potential to provide immediate access to ideas that originate from our research process and tactical thinking. Our analysts meet regularly with many of the companies that we research and we have a strong track record with respect to direct investments in both equities and bonds. Many clients also appreciate the ability to see exactly what the underlying constituents of the portfolio are.

3) Alternative investments

As well as the traditional asset classes such as equities and bonds, we will also consider hedge funds, commercial property and commodity funds. Alternative investments provide access to sophisticated investment strategies typically designed for institutional investors. These investments are often less restricted and offer greater freedom for experienced fund managers to capitalise on opportunities. Historically, some alternative investments have also tended to have a lower correlation with the equity and bond markets, which in some cases has offered increased diversification. As a result we believe there can be a case to selectively include alternative investments in portfolios. 


Investment Management Service