Investment Process


This part serves to explain our Investment Process, detailing the key selection criteria and methodology used in our techniques.  We also discuss our approach to Tactical Asset Allocation and Fund Selection. Where IFAs adopt a particular approach to Asset Allocation and Risk, we adhere to this.

Portfolio Construction

  • House strategy set by EFSL (and / or Investment Committee)
  • Centralised Investment Propositions (CIPs) created to meet individual investment objectives and Risk Profile (includes Responsible Investment CIP).
  • Tactical position updated to reflect market events and investment composition adjustment.
  • On-going Reporting, Analysis of Performance, and Rebalancing (in accordance with IFA processes).

Fund Selection

We pay particular attention to consistency of fund performance, size of funds under management, and use only those instruments where we have confidence in the fund manager’s expertise.  We assess the quality and experience of each fund manager, importantly with regard to longevity at the helm.  We monitor changes to fund managers or merger situations as these can be important barometers of change in ongoing performance. 

We regularly attend presentations / seminars and often meet with fund managers to discuss strategy, outlook and asset distribution.  We also receive regular updates from fund manager houses.  We analyse risk parameters such as alpha and give preference to those funds heavy in recommended sectors and markets (and light in unattractive sectors).  In practice, wherever possible we select at least two funds for a given asset class or region for asset class categories – more for key areas such as the UK in order to represent for example income and growth, or market capitalisation segments, styles and themes such as Sustainable Investment.   We use information services such as FE Analytics extensively.

We believe that a subjective, informed approach using all the above factors is the best way to select, monitor and replace funds, whilst at all times keeping an eye on costs.  Our techniques have been employed since 2009 and statistics show a marked outperformance against all sector averages.  A comprehensive note on EFSL Fund Selection process is available on request.


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