CFG Wealth Management

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Monitoring

The final element in the strategy is our active investment monitoring system (AIMS). This enables us to take advantage of the low (or nil) cost fund ‘switching’ facilities offered by modern ‘fund supermarkets’ There are now several of these fund supermarkets in operation with links to many of the top UK fund management companies. This relatively new concept allows us access to the funds of a wide range of investment companies under a single simplified investment scheme.

Before fund supermarkets existed, changing one fund or investment company to another would involve significant expense, as most funds would incur a charge of typically 5%. Using a fund supermarket we can pick the most appropriate funds for your portfolio and change these without cost at any time e.g. if certain funds lose their sparkle. This facility also enables us to take advantage of gains to consolidate the portfolio at appropriate opportunities by switching some or all of the gain to another fund or into cash.

By systematically monitoring fund performance we are able to capture “upside” gains and also take advantage of temporary dips in the unit price of funds. This system is based on the simple logic that the best time to “buy” is when prices are low and the best time to “sell” is when prices are high!

Switches out of a particular market sector may also take place when it becomes evident that the market is becoming “over bought” and therefore exposed to a possible correction. A classic example was the notorious dot-com bubble, that in the final period was fuelled by sheer greed based on the lure of an apparently ‘never to end’ rise in share prices. Further value can be added by switching back in when market conditions and investment prices are more favourable.

By using the principle of ‘halves’ the exposure is gradually reduced as a market grows ever more ‘top heavy’. Whenever we believe there to be a switch opportunity we will notify you and obtain your instruction to carry out the change.