I can clearly remember the trauma of the markets in the period 2009 up to 2011 and the struggle we had as advisers handling clients when funds were plummeting in value. While as an adviser I have always searched for solutions for my clients and ways to counteract market difficulties, at that time there were nothing but difficulties. AXA hit the marketplace with a new multi-asset platform solution that was going to rescue us all and help our clients out of the mire…. I looked, learned and believed in the offering but alas our market here in Ireland was too small for this French giant and the plug was pulled on the ‘revolution’.
In June 2012 however, Standard Life entered with their solution for the future.
MyFolio offered a series of funds which are diversified globally, by asset class and according to a client’s appetite for risk. They are managed by Standard Life Investments – a global operator with an impressive track record when it comes to managing money. These funds are risk-based and part of the process allows me as an adviser to sit down with my client and chat through a system to identify their attitude to risk, and to arrive at the most suitable MyFolio fund for them. There is a bit more than that involved, as each client has different needs, but the process allows me to arrive with options to hand. The funds contain the traditional asset classes and the newer absolute returns strategies, at which Standard Life were also the pioneers in this market. There are 5 options available in the active management category.
What I have noticed, and what makes perfect sense, is that since launch in June 2012 each MyFolio fund has performed in a range totally in unison with their risk category. What I mean is the ‘lowest risk’ (MyFolio I) fund has given least return and the ‘highest risk’ (My Folio V) fund has given the highest return. My Folio II, III and IV are all in sync also. Logical you might say, but other providers have not produced the same pattern of returns. The opposite is also true; if you look at the negative returns in June 2015 the funds are also falling in unison.
The argument of ‘active fund management versus passive’ has also been addressed by Standard Life with their recently introduced ‘MyFolio Market’ funds. The MyFolio Market suite is managed by renowned passive fund manager Vanguard and allows you to vary your approach even further with your client. Standard Life are very much active managers but believe in the MyFolio process. To capture passive investors they introduced MyFolio Market in January 2014 and again these funds are performing as they should.
Investing with your client in mind is a huge task for advisers today and at Metis Ireland we fully acknowledge that the market CANNOT be called or trusted to perform logically so this is one solution that can help when constructing a plan for your client. The fund managers will look for opportunity and ensure that adjustments are made to keep the portfolio within its agreed risk bands.
MyFolio is only one solution in the marketplace but, in my opinion, it’s a pretty strong option for me as an adviser and gives my clients every chance of preserving and growing their wealth into the future. This is a personal view and should not be seen as an endorsement for the above products or as financial advice.
Co-Founder & Director
Metis Ireland Ltd t/a Metis Ireland is regulated by the Central Bank of Ireland. All content provided in these blog posts is intended for information purposes only and should not be interpreted as financial advice. You should always engage the services of a fully qualified independent financial adviser before entering any financial contract. Metis Ireland Ltd t/a Metis Ireland will not be held responsible for any actions taken as a result of reading these blog posts.