SHEPPARD DAVIES
ASSET MANAGEMENT

SHEPPARD DAVIES INVESTMENT APPROACH

• BALANCED MULTI ASSET: We focus on meeting the needs of specific mandates through genuinely balanced, multi-asset portfolios.
• ABSOLUTE RETURN: We focus on absolute returns, seeking investments which will make money rather than allowing the composition of indices to determine our thinking.
• DIVERSIFICATION/RISK MANAGEMENT: Risk is managed through long term core positions and ranges for each asset class and the high level of diversification in our mandates.
• MANAGER SELECTION: We inherently favour genuinely active managers with unconstrained mandates and combine these with a macro overlay and 'tilting' towards strong themes.
• TYPES OF FUND: As well as rigorously researching the entire universe of unit trusts and OEICS, unlike the majority of multi-managers, we possess particular expertise in investment trusts and investment companies.
• ALTERNATIVE ASSETS: We also use venture capital, property and alternative assets alongside traditional asset classes to enhance the risk/return profile of individual mandates.
• PRAGMATIC: We are open to new thinking and products and alive to substantial asset price movements offering scope for significant value driven returns. We seek to exploit momentum but are always vigilant towards 'bubbles'.
• LOW TURNOVER: Funds are managed for the longer terms with an average expected holding period of three to four years.
• ANOMALIES: We do, however, seek to exploit pricing anomalies which occur from time to time in under-researched and commonly misunderstood investment sectors such as investment trusts.
• INDEPENDENCE: We have no affiliations to particular managers or structures - we are completely impartial when selecting funds.

FURTHER THOUGHTS:

Philosophically we are opposed to 'tracker' funds and even more so to those that claim to be active when in fact they are 'index huggers'.

We find the concept of 'relative return' wholly illogical. We believe that managers should at all times hold their best ideas only and not include poor stocks simply because they constitute part of an index.

We uncover the lion's share of talent within fund boutiques which tend to be owned and managed by experienced entrepreneurial individuals whose passion is purely running money and not the bureaucratic aspects often prevalent within larger companies.

We are reassured by managers who 'eat their own cooking' i.e. have a substantial proportion of their own wealth committed to the funds they manage, in so doing ensuring that their interests are closely aligned with those of their investors.