Product review: Signature Hybrid Portfolio Service
Rowan Dartington’s discretionary management arm rolls out product line aimed at risk-rated funds market
A range of portfolios focused on risk is the latest offering from stock broker Rowan Dartington’s discretionary management service.
Signature, the company’s discretionary manager, has created a suite of five model portfolios that it describes as “risk-budgeted” under the Signature Hybrid Portfolio Service.
The five risk options include defensive, cautious, balanced, moderately adventurous and adventurous.
Three strategy options are available within each. The growth strategy focuses primarily on equities, whereas the income strategy additionally includes fixed interest. There is also a combined growth and income option.
The portfolios are actively managed with quarterly rebalancing and, during periods of volatility can undergo additional tactical rebalancing.
Security risk, portfolio risk, asset allocation and geographic positioning will be monitored under the firm’s recently launched ‘Four Dimensional’ investment process.
Each portfolio invests in funds – including investment trusts and ETFs – as well as directly into equities.
Minimum initial investment is £50,000. Additional investments are minimum £1,000 for one-off top-ups and £500 for regular investment. Fund charges include an AMC of 0.5%, an underlying fund TER of 0.48% an administration charge of 0.3% and a transaction cost of £3 per deal. Total TER for each fund is 1.28%.
Signature’s new portfolio range appears to be trying to straddle the gap between full discretionary management and risk-rated funds. By offering a choice between growth and income as well as a range of risk levels, the portfolio range starts to look like a tick-list of what clients are trying to achieve.
Signature seems to be pitching the range as a step-up from risk-rated funds, which generally revolve around a default asset allocation with some tactical overlay. In this model, it plans to combine its in-house expertise in both stock-picking and collective investments to achieve risk aims, separating them somewhat from the typical multi-manager risk-rated fund.
The minimum investment level is low in terms of discretionary fund management so clearly Signature is going for another market. The service is really targeting advisers with clients who have a certain level of assets: not low enough to be content with a diversified stocks and shares ISA, not high enough to warrant the extra fees of a full discretionary service.
While advisers might traditionally have managed portfolios like these themselves, the RDR is forcing more consideration of costs, efficiency and suitability. Solutions such as this one could be a decent solution for those middle ground clients – as long as their performance is good enough.