What we offer Financial Advisers

Cantab offers a comprehensive Managed Portfolio Service (MPS) to Financial Advisers which includes a specialist ESG Portfolio Service to suit clients requesting more sustainable (ESG) investment solutions.

The Managed Portfolio Service is for clients preferring a segregated portfolio. Cantab has a series of risk-rated portfolios used in line with a client’s attitude to risk in a range of wrappers including Self Invested Personal Pensions (SIPPs), ISAs, offshore and onshore bonds.

Cantab Portfolio Range Cantab ESG Portfolio Range
‘Defensive’ Portfolio (Risk 3) ‘Defensive’ ESG Portfolio (Risk 3)
‘Cautious’ Portfolio (Risk 4) ‘Cautious’ ESG Portfolio (Risk 4)
‘Moderate’ Portfolio (Risk 5) ‘Moderate’ ESG Portfolio (Risk 5)
‘Balanced’ Portfolio (Risk 6) ‘Balanced’ ESG Portfolio (Risk 6)
‘Adventurous’ Portfolio (Risk 7) ‘Adventurous’ ESG Portfolio (Risk 7)

Risk Ranking Affiliations

The Cantab portfolios are rated and ranked by Asset Risk Consultants (ARC) and Defaqto to ensure our solutions resemble the appropriate risk-return profiles for clients with different attitudes and capacities to risk. This relieves the compliance burden for advisers allowing them to focus on client relationships and business development.

Performance

The Cantab Managed Portfolios have achieved material outperformance over their respective benchmarks over a range of time horizons. Cantab has also achieved top quartile performance rankings from Asset Risk Consultants (ARC) that go back over 10 years.

What investment framework do the portfolios follow?

The Investment Framework follows a Multi-asset approach in the construction of a diversified portfolio of daily dealing open-ended funds and investment trusts. Diversification is achieved both geographically and by asset class, which typically includes equities, fixed interest and infrastructure.

Long-term Buy and Hold
  • Decisions are made with a 5+ year horizon
  • Changes are minimised unless investment case has fundamentally changed
Style agnostic
  • Recognition that different styles outperform at different stages of the cycle
  • Bottom up and top down consideration
Manager consistency and track record
  • Active bias where managers have delivered consistent outperformance after fees
Clear, understandable strategy
  • Investment process transparent and easy to understand
  • Informed by Cantab individual equity research
Appropriate diversification
  • Equities: prefer managers who take high conviction positions in relatively concentrated portfolios
Minimal tail risk
  • No investment in ‘black box’ structures

Cantab Managed Portfolio Service Overview

What are the objectives of the portfolios?

The portfolios seek to generate superior risk-adjusted returns with a robust and disciplined investment process. The focus is on investing in actively managed funds with a track record of strong risk-adjusted returns and holding them for the long term.

How many funds will the portfolios contain?

The portfolios typically invest in 15-25 funds and are well diversified both by region and industry.

What restrictions are in place?

The portfolios typically would not invest in open-ended property funds to reduce liquidity risk and also do not invest in ‘black box’ structures to minimise tail risk.

What is the investment process of the portfolios?

With a global fund universe of over 3,000 funds, the first step revolves around excluding funds with short performance track records. This is followed by historic performance analysis which aims to identify funds that have consistently outperformed peers whilst achieving top quartile risk-adjusted returns over long time horizons.

Analysing quantitative risk metrics provides the investment team with insights on the performance behaviour of funds during periods of material economic stress. This feeds into portfolio construction to ensure each portfolio is consistent with its stated risk profile. The quantitative risk analysis supports the qualitative assessment of funds, which primarily focusses on the diversification benefits associated with different geographies, investment styles and fund houses. Finally, when selecting a fund, Cantab aims to build personal relationships with managers, which usually involves meeting the investment team.

Using a proprietary monitoring framework, weekly research meetings and quarterly investment reviews are conducted to ensure that the underlying holdings in the portfolios continue to meet the investment case.

What is the portfolio turnover and what limits are in place on position sizing?

We intend to hold positions for the long term, and so portfolio turnover will be low. A typical investment size for a holding will range between 5% and 15% of the portfolio, and for risk management purposes we will not let a position grow beyond these levels. Managed portfolios are rebalanced monthly.

What investment style will the portfolios employ?

We do not recommend wholesale adoption of any single investing style, believing a blend of styles is key to generating superior long-term, risk-adjusted returns.

Cantab ESG Managed Portfolio Service Overview

What are the objectives of the portfolios?

The portfolios seek to generate superior risk-adjusted returns with a robust and disciplined investment process. The focus is on investing in active ESG-mandated funds that clearly integrate Environmental, Social and Governance (ESG) factors and holding them for the long term.

How many funds will the portfolios contain?

The portfolios typically invest in 15-25 funds and are well diversified both by region and industry.

What ESG restrictions are in place?

The portfolios will not invest in funds that do not have an active ESG mandate or those that do not clearly illustrate the integration of ESG principles into their investment decision making. Due diligence is conducted to ensure no ‘Greenwashing’ and to identify whether managers follow through on the ESG restrictions they have set.

What is the investment opportunity

While many asset owners remain focused purely on the generation of financial returns, the growth of ESG investing is undeniable and undeniably appropriate, in our opinion. Indeed, the world is warming up to the belief that we need to invest more responsibly, in terms of how we treat the environment, but also with respect to how corporations behave from a social and governance perspective.

How does ESG fit into the investment process?

It is important to recognise that, while the media may focus on one specific aspect of these ESG building blocks at any point in time, as investors we need to maintain a balanced approach to all the stakeholder issues a company might face. From an investment perspective, while the above considerations are embedded into our investment process, our overriding aim is to generate superior investment returns for our clients.

What investment style will the portfolios employ?

We do not recommend wholesale adoption of any single investing style, believing a blend of styles is key to generating superior long-term, risk-adjusted returns.

What is the portfolio turnover and what limits are in place on position sizing?

We intend to hold positions for the long term, and so portfolio turnover will be low. A typical investment size for a holding will range between 5% and 15% of the portfolio, and for risk management purposes we will not let a position grow beyond these levels. Managed portfolios are rebalanced monthly.

Factsheets

Find out more about our Managed Portfolio Service

Risk warning:
The value of investments and the income therefrom is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than you originally invested. The value of overseas securities will be influenced by the rate of exchange which is used to convert these to sterling. The opinions expressed herein are those of Cantab Asset Management Ltd and should not be construed as investment advice. Past performance is not a guide to future performance.

ESG Performance Warning:
It is important to note that in selecting ESG investments, a screening out process has taken place which eliminates many investments potentially providing good financial returns. By reducing the universe of possible investments, the investment performance of ESG portfolios might be less than that potentially produced by selecting from the larger unscreened universe.