Our investment portfolios are actively managed to outperform over market cycles and provide smoothed risk-adjusted returns.
As an example of how the Crossing Point trend-following strategy works, we show the returns of the strategy through the use of equity market indexes and the current Adventurous equity asset allocation. The 23-year time period, from August 1996 to August 2019, exposes the strategy to a number of diff erent market conditions.
Because not all of the unit trusts, ETFs, or the basket of alternative safe haven assets existed over the entire 23 years, this time frame does not allow for a complete replication of our strategy. Instead, we have refl ected how the equity investments would have performed through the use of indexes trading directly into either cash or the UK All Stock Gilt Index to represent the safe haven basket.
The complete, backtested, simulated portfolio results using our selected unit trusts and the basket of safe haven alternative investments when not in equities is available for 5 years in our factsheets. We will continue to publish the performance of our live portfolios against the Investment Association benchmarks every month including risk measures such as volatility, alpha, beta, maximum drawdown, Sortino ratio and Sharpe ratios.
This graph displays an example of the simulated performance of £100,000 invested in the current Crossing Point Adventurous equity asset allocation using our trend-following strategy and trading into cash when not invested in equities compared to the same portfolio and asset allocation of equity indexes invested without any tactical trading. The sections of the graph when the Crossing Point strategy signals to be out of all equity markets and instead invested in cash are shown as flat lines through portions of 2000-2002 and 2007-2009 while the buy and hold portfolio drop in value. Over this time period, the Crossing Point strategy delivers a greater increase in portfolio value through the removal of the worst of the market drops.
This graph displays an example of the simulated performance of £100,000 invested in the current Crossing Point Adventurous equity asset allocation using our trend-following strategy and trading into the UK All Stock Gilt Index when not invested in equities compared to an investment into the same portfolio of equity indexes with the same asset allocation without any tactical trading. The use of gilts instead of cash provides further return when out of equity markets compared to the negligible return from cash. Since 2009 the returns to gilts have been augmented due to quantitative easing by central banks around the world.
The Crossing Point trend-following trading strategy contains a mix of crossovers for further diversification. This is an illustration of how the Crossing Point strategy would have performed during the 2 years around the 2008 financial crisis. These two years were chosen as an example of how trend-following works when equity markets drop.
The graph at the top of the page shows the simulated performance of £100,000 invested in the current equity asset allocation from the Crossing Point Adventurous portfolio using our trend-following strategy and trading into the UK All Stock Gilt Index when not invested in equities compared to an investment into the same portfolio of equity indexes with the same asset allocation without any tactical trading.
The chart on the bottom of the page coincides with the two years shown in the above graph. Every month the equity trade decisions are decided by market movement. If trend-following signals showed that the market was dropping and the market investment should have been 0%, then this is shown in red. Shades of green represent the level of equity investment with dark green indicating a 100% investment.
This graph displays the simulated performance of a £500,000 investment into the Guardian Balanced portfolio over 5 years from October 2014 taking an annual income of 3.5% compared to the same income from the Investment Association 40-85% benchmark. This graph provides an illustration of the advantages of the Guardian portfolios which smooth returns by reducing volatility, maximum drawdown losses and sequence of returns risk when compared to the benchmark especially when there are dips in the market such as in 2015 and late 2018. By using Guardian portfolios an investor would have ended the 5 year period with a significantly higher value in the investment. This graph illustrates the benefits of reduced volatility upon income paying portfolios.
This graph displays the simulated performance of a £500,000 investment into the Guardian Balanced portfolio over 5 years from October 2014 taking an annual income of 5% compared to the same income from the Investment Association 40-85% benchmark. This graph provides an illustration of the advantages of the Guardian portfolios which smooth returns by reducing volatility, maximum drawdown losses and sequence of returns risk when compared to the benchmark especially when there are dips in the market such as in 2015 and late 2018. By using Guardian portfolios an investor would have ended the 5 year period with a significantly higher value in the investment. This graph illustrates the benefits of reduced volatility upon income paying portfolios.
All Guardian portfolios have outperformed across all time periods. Our further statistics such as volatility, maximum drawdown and sortino ratios are all also better than the relevant benchmarks.
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