Our investment portfolios are actively managed to outperform over market cycles and provide smoothed risk-adjusted returns.

Performance & Backtesting

Crossing Point’s trend-following strategy for portfolio management is a relatively new process and has therefore had to be retrospectively backtested. Our investment process follows a strict rules-based system.

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.

Examples of how the Crossing Point trend-following strategies work

Example 1: Crossing Point strategy trading into cash vs. buy and hold portfolio - Aug 1996 - Aug 2019

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.

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Example 2: Crossing Point strategy trading into the UK All Stock Gilt Index vs. buy and hold portfolio - Aug 1996 - Aug 2019

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.

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Example 3: Crossing Point trend-following strategy trading into the UK All Stock Gilt Index vs. buy and hold portfolio - Jan 2008 – Jan 2010

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 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 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.

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Example 4: Crossing Point Guardian Trend-following during the Coronavirus Crisis

The Crossing Point Guardian trend-following trading strategy minimises risk through an international asset allocation and a mix of trend following moving average crossovers for further volatility management. The above chart illustrates the Crossing Point Guardian trade decisions during the coronavirus crisis.

The graph at the top shows the performance of £100,000 invested into the Crossing Point Guardian Balanced portfolio from 31st January to 8th June 2020 using our trendfollowing strategy compared with the benchmark without any tactical trading. An investment in Guardian Balanced would have ended the period with £3,707.58 (3.84%) more than an investment in the benchmark.

The chart on the bottom reflects the trade decisions by international equity market and coincides with the months shown in the above graph. Each equity fund investment decision was decided individually and informed using trend-following signals. An equity investment of 0% is shown in red. Shades of green represent varying levels of equity investment with dark green indicating a 100% investment.

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Guardian Portfolios as a Decumulation Strategy

Example 5: A £500,000 investment over 3 years with a 4% annual income paid monthly Guardian Balanced Portfolio vs. IA Mixed Investment Benchmark 20-60% Crossing Point portfolio data is simulated until trading went live on Feb 1, 2020.

This graph displays the simulated performance of a £500,000 investment into the Guardian Balanced portfolio over 3 years from May 2017 taking an annual income of 4% compared with the same investment and income for a portfolio based on the Investment Association 20-60% benchmark. From Feb 1st 2020 when Guardian portfolios went live, the data is no longer simulated. 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 with the benchmark especially when there are dips in the market such as in late 2018 and beginning of 2020 due to the coronavirus crisis. By using Guardian portfolios, an investor would have ended the 3-year period with £29,020.61 (6.4%) more than an investment in the benchmark. This graph illustrates the benefits of reduced volatility upon income paying portfolios.

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Examples of income withdrawals for 5 years from a Guardian portfolio

Example 6: Guardian Balanced Portfolio Simulation of a £500,000 Investment Taking a 3.5% Annual Income vs the IA Mixed Investment 40-85% Benchmark

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.

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Example 7: Guardian Balanced Portfolio Simulation of a £500,000 Investment Taking a 5% Annual Income vs the IA Mixed Investment 40-85% Benchmark

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.

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