Growth and Defensive Assets
Growth and Defensive Assets Growth assets As the name implies, Growth Assets are investments that are geared for higher returns. Equities and Property are generally accepted as being growth assets due to their higher average return over the long term even though the value of these assets can fluctuate vastly over shorter periods. The graph below shows that despite short periods of fear and loss, over the long term the equity market has delivered real growth. Defensive Assets Cash and bonds are assets that have shown to have a less volatile asset value over the short term but deliver lower long term returns than Growth Assets. These are therefore considered Defensive Assets. The graph below compares the returns of growth assets (Equities) versus inflation (as measured by CPI) and defensive assets (Cash and Bonds), clearly illustrating the difference in the... Read More
Asset allocation
Asset allocation Asset allocation is a frequently referred to – and commonly used – important term in the investment arena, specifically referring to how an investor’s money is allocated to the underlying assets used in the construction of an investment portfolio. The most common asset classes are: Equities: (i.e., shares on the stock exchange). Bonds: governments or corporates need to raise capital and loans are created and sold either to the public or asset management houses. Cash: money market funds and fixed deposits are good examples of this. Property: generally unitised portfolios of corporate property (industrial and office type properties) being let out by a holding company. Alternative investment strategies used by hedge fund managers, (commodities, crypto currencies, leveraged trading in equities and bonds) form part of a wider range of asset classes that could be used in the construction... Read More
Risk profile
Why Risk profiling and not a risk questionnaire? Research shows that investors frequently construct the design of their investment portfolio on past experiences and their own interpretation (or experience) of risk. Previously experienced volatility and past performance too significantly contribute to the nomination of the portfolio design. Research also shows that many financial advisors prefer to agree with a client’s interpretation and nomination of a portfolio design, rather than differing with them on this important subject. The actual client requirements and subsequent portfolio construction are often not empirically tested or processed on an independent basis. Frequently a risk questionnaire is completed with a score or rating applied to each answer. The answers range from a conservative to an aggressive option, with many of the questions being based on the client’s perception of risk, and not on quantitative, researched, or clinical... Read More
Investment Mandate
Discretionary Investment Mandate (CAT II) The Investment Mandate that you sign with GTC is in accordance, and the wording is based on the template provided by the Regulator, the FSCA. GTC operates a Category II license, which means that clients’ contract with GTC in accordance with a CAT II discretionary Investment Mandate. This mandate provides GTC with the authority to amend portfolios without having to get signed documents each time from our clients, resulting in a more efficient, more expedient portfolio management. A copy of GTC’s standard Investment Mandate can be viewed here.
