Netwealth, a discretionary wealth management service launched in May 2016, has delivered strong portfolio performance in each of its first two years, with its seven sterling-based portfolios outperforming wealth management peers by between 3 per cent and 8 per cent.
Charlotte Ransom, CEO of Netwealth, says: “This high quality performance in our first two years reflects Netwealth’s experienced team and robust investment framework focused on diversification and efficiency, in addition to the benefits of low fees. Our aim is to continue to provide an outstanding service to our clients and to build on these excellent returns.”
Iain Barnes, Head of Portfolio Management at Netwealth, says: “Our outperformance in the first year was driven by a combination of factors, including strategic decisions linked to the economic and financial outlook as well as assessing market expectations and risks ahead of some potentially key event risks, such as the UK Referendum and US Presidential elections and important policy decisions.
More recently, our performance benefited from avoiding some of the common mistakes made by traditional wealth managers, such as misallocating to expensive, and often unsatisfactory, diversifiers in the alternative investment space. It is also likely that some managers were tempted to de-risk clients’ portfolios at inopportune times during the volatile periods in the first quarter of the year, thereby missing out on subsequent gains.
“We continue to emphasise the lasting damage that compounding high costs can do to long-term returns, and our two year returns underscore this point. We estimate that this discipline on costs has contributed around 1.2 per cent per annum to our clients’ net of fee portfolio returns.”