AM&A Balanced Hybrid Portfolio

The AM&A Hybrid Balanced Portfolio offers a blend of our recommended active and passive funds, balancing cost and diversification benefits with our proven track record of delivering superior risk adjusted returns.

A balanced investor is concerned by short-term losses but understands that some risk is needed in order to have the opportunity to achieve better returns. A balanced investor believes that the safety of their investment and achieving investment returns are similarly important. A balanced investor is able to leave their money invested despite a fall in the value of their investment in order to try to recover their losses.

The AM&A Hybrid Balanced Portfolio is benchmarked against the IA 40-85% shares index so will share risk and volatility characterises consistent with the benchmark whilst seeking to deliver returns in excess of the benchmark although this cannot be guaranteed.

The portfolio offers significant exposure to global stockmarkets, combined with a substantial holding in less risky assets which can reduce any capital loss in the event of a serious market fall. The capital value of the portfolio may fall, and an investor is not guaranteed to receive back the amount invested.

Although the capital return from this portfolio is potentially higher, the risk of this portfolio producing a capital loss whilst less than placing the whole fund in shares may be substantial especially in the short term. Any income received from this portfolio may fall as well as rise. This portfolio contains securities invested outside the UK, which may be subject to additional risks as a result of changes in currency exchange rates.

Although the model portfolios are for clients with a particular attitude to risk, some individual funds may be higher risk than the overall portfolio and some of lower risk; this is to deliver an overall portfolio to achieve the objectives of this risk profile.

Investors should be aware that investing in passive funds, whilst eliminating many of the biases and potential for misjudgments inherent in actively managed strategies, brings risks of its own. This is largely due to the fact that the managers of the fund have little to no discretion as to the timing of trades and the selection and sizing of holdings. Investors should also be aware that in a sharp sell off the fund will fall in line with the index and that there is no flexibility for the managers to mitigate this.

The performance of passive funds, all else equal, is likely to lag the index slightly over time because of the impact of fees, although the managers will try to regain some of this by taking small views, where allowed, on the timing of purchases and sales.

Full details on this portfolio can be viewed here: AM&A Balanced Hybrid Portfolio April 2021