24 June, 2014
Walden Capital: Already a Leader?
Here, David Cooper, our CEO shares his vision of what makes Walden Capital a special company to work with.
"I've been leading Walden Capital for about a year now and in that time we have introduced many new ideas and really improved what we can offer to our clients. Despite its strong local heritage and long track record it often feels like a start-up company to me.
Perhaps the biggest change is the investment philosophy. Gone are the bets on 'star' fund managers. Instead, we have now created our own model portfolios for our clients by relying on a scientific process of blending low-cost, index-tracking investments to achieve the maximum possible diversification, targeting specific levels of risk and asset allocation aiming for the best return outcomes at each risk level.
A week ago, Prof Jon Rushman and I attended a 3 day conference on ETFs in Amsterdam where we were seen somewhat surprisingly as thought leaders by our IFA peers and fund management houses alike. Although all IFAs in the UK, and soon in Europe, are faced with regulation forcing them to become more transparent in their fees, few of them are as well adapted to the new regime as Walden Capital. For me, there was validation that we have one of the most well thought out investment processes of any Wealth Management business including those of extremely large institutions. There was also the comfort of knowing that a legion of index-fund providers are competing hard on cost whilst supporting the turning of the tide towards passive funds.
My conversion to this Nobel prize winning investment philosophy was based around 2 key pieces of evidence. Firstly, asset allocation can be responsible for more than 80%* of a diversified portfolio's return patterns variation over time and secondly, the majority of actively managed funds will underperform their benchmarks**."
* “Determinants of Portfolio Performance", Brinson, Hood and Beebouwer (1986)
**Vanguard (March 2014) https://www.vanguard.co.uk/documents/inst/literature/case-for-index-fund-investing-uk.pdf
Originally published on David's linkedin profile here