Each Stockspot Portfolio provides exposure to over 1,400 global stocks, bonds and commodities. Some of the benefits of a broad diversified portfolio over a more concentrated portfolio are lower country risk, lower industry risk & less stock specific risk.
Most investment professionals agree that diversification is the key factor for achieving long-term market returns while mimimising risk. Even one of the world’s highly regarded investors, Warren Buffett, wrote in his 1993 letter "By periodically investing in an index fund the know-nothing investor can actually outperform most investment professionals."
Compared to a typical active equity managed fund offered through an adviser on a WRAP platform, the Stockspot Portfolios may have the advantages of: lower fees, lower portfolio turnover, greater flexibility & transparency including daily valuation, and the benefits of beneficial ownership including reduced counterparty risk and potential tax efficiency benefits.
Compared to a Do It Yourself investment strategy, the Stockspot Portfolios may have the benefit of strategic asset allocation and rebalancing which enables you to potentially achieve a better risk versus reward profile with less paperwork & lower transaction costs.
Strategic asset allocation has previously been available only to wealthy investors through financial advisers. Typically, those advisers charge high annual fees and require you to have hundreds of thousands of dollars invested. By implementing strategic asset allocation with model portfolios, Stockspot is able to offer a sophisticated investment service at a much lower cost.
It is important to understand that, even with a sensible diversified investment strategy and appropriate time horizon, investing always involves some risk. Any investment portfolio can go up and down in value. The Stockspot Portfolios attempt to reduce risk by employing Modern Portfolio Theory (MPT). The economists who developed MPT, Harry Markowitz and William Sharpe, received the Nobel Prize in Economics in 1990. Today, MPT is the most widely accepted framework for managing diversified investment portfolios. However, even a portfolio that is diversified across asset classes and geographies will experience periods of negative performance. A level of volatility is normal for any investment.
To improve the probability of a positive return over your intended time horizon, Stockspot matches clients with a portfolio that is consistent with their risk profile and investment horizon. Notwithstanding, no guarantee can be given in respect of the future earnings of the Stockspot Portfolios or the capital appreciation of your investments. The price of investments that Stockspot has purchased on behalf of you can fall as well as rise over time. There are risks associated with the underlying investments, which are outlined in the relevant PDS for each ETF. Please carefully read the risks summarised in the Stockspot FSG, Stockspot MDA Guide and the PDS documents for each ETF before making a decision on whether to invest.