Elston Consulting has launched a Charity Multi-Asset Income portfolio using 12 iShares ETFs.
It aims to target a total return of 4 per cent above inflation over the long-term, with an income yield of approximately 3.6 per cent, diversified across a range of asset classes.
These selected iShares ETFs represent 5,654 underlying securities and £8.5bn of assets under management as at May 2016.
Additionally, the weighted average total expense ratio of the strategy is 0.42 per cent, based on current weightings.
Elston Consulting stated portfolio managers and financial advisers working with charities can license research portfolio directly from the firm, or on request to their platform provider.
Its portfolio construction process uses a proprietary quantitative model for the screening, selection and optimisation of portfolios of ETFs.
The research portfolios can be constructed or adapted for clients by wealth managers and financial advisers using ETFs listed on the London Stock Exchange and available through platforms or brokerages.
Henry Cobbe, head of research at Elston Consulting, explained that advisers working with charities can offer a systematically constructed broadly diversified investment strategy that aims to provide a regular income and above inflation returns at very low cost.
Joe Parkin, head of iShares UK wealth and retail sales at BlackRock, said: “There is a clear trend towards investors of all types using ETFs to manage their portfolios.Investors can choose from a diverse range of exposures, spanning global geographies and asset classes, to express their unique views while keeping investment costs down.”
Andrew Whiteley, director at Hertfordshire-based Provisio Wealth Management, said his firm runs similar portfolios without limiting underlying funds to just those of iShares, in the belief there are better alternatives in certain asset classes.
“Also, whilst the portfolio costs are 0.42 per cent, it is not clear whether or not this includes the portfolio management cost,” he stated, adding since Elston are not regulated to manage portfolios, he expected they charge IFAs a consultancy fee for the ongoing asset allocation advice.”
ruth.gillbe@ft.com
