Best in Class: Close Managed Income
One of the first heavyweight clashes of Euro 2020 was when world champions France faced Germany in Munich.
It was a star-studded affair, with the likes of French sensation Kylian Mbappé locking horns with Germany’s veteran striker Thomas Müller.
But for all the attacking talent on show it was a Chelsea midfield player who caught my eye (funny that), as N’Golo Kanté stole the show in helping France pick up a 1-0 win. Kanté is a dream to have in your team.
He never stops working to win the ball off the opponent, building the foundations that allow the headline-makers in the French team do just that in the final third.
He does the same for Chelsea; he is the lynchpin among a number of expensive players that helped us to acquire the Champions League last month. Only a well-oiled machine runs smoothly – and Kanté makes sure that is the case for both Chelsea and France.
This week’s Best in Class has a similar role within an investor's portfolio; it is not a headline stealer, but looks to be a consistent performer.
The Close Managed Income fund is a multi-asset offering that invests in both actively managed funds and exchange-traded funds. It sits on the conservative side of the risk spectrum, focusing on preservation of capital and income generation. It does this by diversifying across numerous asset classes and geographies.
The fund is managed by the trio of Matthew Stanesby, Sam Grant-Dalton and James Davies, and is backed by the plentiful resources at their disposal from the wider Close Brothers Group.
The investment process behind building the fund is conducted in four stages. The first of these is strategic asset allocation, where the team works with independent consultant Moody’s to construct the multi-asset portfolio’s boundaries in terms of exposures to asset classes and geographies.
This is done on a quarterly basis, with a formal review meeting taking place annually. The quarterly meeting involves all 70 of the investment professionals at Close Brothers.
The second stage is tactical asset allocation, which feeds into the daily, weekly and monthly meetings the team has to discuss market movements. The tactical asset allocation meeting takes place monthly, with a person from each of the high net worth teams at Close attending – as well as the multi-asset managers. Asset allocation positions are formalised at this stage.
The third stage is fund selection, with the Managed Income fund having the ability to invest in third-party funds, as well as investment trusts and passives.
This stage sees the managers adhere to the 'Four P’s' (people, philosophy, process and performance), before forming a buy list of around 130 funds. The final stage is a weekly review of the portfolio to ensure it stays within its permitted investment boundaries.