Our MPS investment portfolios are actively managed to outperform over market cycles and provide smoothed risk-adjusted returns.
Trend-following Back Testing
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Crossing Point’s trend-following strategy for portfolio management has been rigorously back tested and 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 different market conditions.
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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 reflected 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 including risk measures such as volatility, alpha, beta, maximum drawdown, Sortino ratio and Sharpe ratios.
Guardian Portfolios as a Decumulation Strategy
Example 1: 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.
(Click to enlage)
Examples of income withdrawals for 5 years from a Guardian portfolio
Example 2: 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.
(Click to enlage)
Example 3: 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.
(Click to enlage)
Examples of how trend-following strategies work
Guardian Trend Following During A Crisis
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Guardian trend following during a crisis document shows how the strategy worked in back testing during the 2008 crisis and live through the Covid-19 crisis.
Sequence of Returns Risk
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This document demonstrates the impact that the sequence of positive and negative rates of return can have on an investment.
