High quality funds
Exchange-traded funds are very popular tools used by a wide range of investors,
from institutional investors and hedge funds to pension schemes and private clients.
There are over 1800 ETFs listed for sale in the UK, from 24 different providers.
For each asset class in our portfolios, we select the fund we believe offers the best mix of performance, quality and value for money and upgrade them when a better one becomes available. This process has brought the average fund cost of our fully managed portfolios from 0.27% to just 0.19% annually over the past three years. Our fixed allocation portfolios have a lower average of 0.17% for the fund costs.
This means that every £1 is put to work as efficiently as £10,000 would be, with each dividend received reinvested across your whole portfolio. Other providers trade ETFs in lots of one share, which with some ETFs costing well above £100 per share makes building a diversified portfolio difficult, even with large portfolios. Our systems, on the other hand, can hold a small fraction of one share, effectively owning pennies in any ETF, which makes global diversification effective at any portfolio size.
Typically, our in-house dealing team is able to buy investments at a price 0.08% lower or sell at 0.08% higher* than the market price. We make this happen in a few ways: 1) Rather than dealing on the London Stock Exchange, we deal directly with specialist ETF 'market makers' across Europe to get the best possible prices, and 2) we match deals between clients selling and clients buying to reduce trading further. These improvements add up over time: we saved our customers over £1,000,000 in 2016 alone.**
* Based on all trades conducted in 2016, this is the difference between the market quoted price at the exact time of the trade and the price we obtained.
** Based on the cumulative effect of this difference across all trades conducted in 2016.