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Our model portfolios

Walden Capital’s Investment Committee, comprising senior figures from the City of London and academia, has built each of our seven model portfolios to align with the seven categories of risk grouping identified by the Finametrica risk profiling tool.

Having identified how much risk you are comfortable taking, we then match this same level of risk to one of these specially constructed portfolios.

We utilise Nobel prize-winning academic investment theory to gain exposure to the most appropriate asset in the most diversified and cost-effective manner.

As a result the OCF (ongoing charge figure) for our portfolios ranges between 0.36 per cent and 0.50 per cent, with the number of individual assets held running into many thousands. Our Investment Committee review the portfolios on a quarterly basis and also invest a significant portion of their own wealth.

Maximising returns

Our risk categorisation is measured in terms of the volatility you can expect from a portfolio comprising various different assets that will exhibit different return characteristics. Volatility is simply how ‘bouncy’ returns are around an expected average return. For example, cash has a low volatility as the daily return of a bank deposit rate is very stable, whereas a single share could be highly volatile due to a constantly moving price.

The technical name for the model used by our Investment Committee is covariance analysis and is built using a correlation matrix. The idea is that each of our portfolios attempts to maximise the returns available for a given level of risk, taking into consideration asset data for the last 10 years.

Although the past is not a guide to the future it does suggest certain patterns and levels of correlation between assets that could provide mathematically higher dimensions of return when blended together.

We cannot tell you how much you will make from being invested in our portfolios over any given timeframe, but we can say that over the longer term those with a higher categorisation of risk will produce a greater return but also exhibit a higher level of volatility.

Growth of Wealth

Growth of Wealth Illustration in percentage growth terms. Click image to enlarge.