The PortfolioMetrix MPS is among the top 10 fastest-growing, according to an article in Citywire Wealth Manager which profiles the latest NextWealth MPS proposition comparison report. This follows on the heels of us winning Best Model Portfolio Service at this year’s Professional Adviser awards.
NextWealth profiled 27 DFMs in their latest report but previous reports from 2019 and 2020 featured 19 firms – including PortfolioMetrix – which allowed for comparisons to be made.
Active v Passive
The report was covered by a number of trade titles, such as Investment Week, which highlighted the finding that average MPS allocations had shifted slightly (1.7%) towards active over the last six months.
Only one DFM has made a significant move towards passive. This is interesting because, with so much being made in the media recently about a ‘race to the bottom in terms of MPS pricing, we might have expected to see more DFMs migrate to a higher proportion of passive. The fact that there has been a small shift towards active shows that investment managers are opting for a blend of both, rather than seeking to put all their eggs in one basket.
This is certainly the style we adopt at PortfolioMetrix. Our portfolios use a blend of active managed funds but we will use passives if there is an asset class or geography where we don’t have the conviction that there is an active manager who can generate alpha, after fees.
Exhaustive due diligence sits at the heart of our fund selection process. Using a mix of qualitative and quantitative research is central to enabling us to identify those managers who are worth their fees. But the process doesn’t end there, we continue to check in with them regularly to ensure they are staying true to their stated mandate and objectives.