Aim of Portfolio:
| Aim | Benchmark | Time frame | Risk / volatility | Exclusions | Capital at risk | |
| Cautious Portfolio | To deliver a return of between 6% and 8% gross over the long-term. This should, in a normalised environment, be above the higher rate of cash or inflation. | Basket of strategies that track an index (for example, the FTSE 100) | 10-years plus | This is our lowest risk strategy. This is best suited to more risk-averse investors. It has a higher weighting to defensive assets such as fixed income (bonds), and real assets (infrastructure and property) and a lower exposure to traditional UK and international growth assets. | No specific exclusions. | Yes |
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Portfolio Review:
Performance:
The Portfolio was launched on 1 January 2009. The chart shows the total return up to 30 June 2023.
| 10-year Annualised Return | Total Return Since Launch | Annualised Return Since Launch | |
| Cautious Portfolio | 5.11% p.a. | 191.67% | 7.66% p.a. |
| LWM Benchmark | 3.82% p.a. | 108.72% | 5.21% p.a. |
| 2019 | 2020 | 2021 | 2022 | 2023 | Since Launch | |
| Cautious Portfolio | 16.75% | 8.25% | 10.35% | -12.65% | 0.14% | 7.66% p.a. |
| LWM Benchmark | 12.18% | 6.53% | 5.91% | -12.30% | 2.26% | 5.21% p.a. |
| 1 Year to 30/06/19 | 1 Year to 30/06/20 | 1 Year to 30/06/21 | 1 Year to 30/06/22 | 1 Year to 30/06/23 | |
| Cautious Portfolio | 4.27% | 0.11% | 21.15% | -9.79% | 0.23% |
| LWM Benchmark | 4.09% | 2.63% | 11.86% | -9.73% | 0.52% |
Volatility
You should note that past performance is not a reliable indicator of future returns and the value of your investments can fall as well as rise. The total return reflects performance without sales charges or the effects of taxation, but is adjusted to reflect all on-going fund expenses and assumes reinvestment of dividends and capital gains. If adjusted for sales charges and the effects of taxation, the performance quoted would be reduced.
Split by funds within the Portfolio (as at 1 July 2023):
Read portfolio review 2023 summary.
Important notes
What is the difference between the aim of the strategies and benchmark?
The target or aim is to deliver returns of 6% to 8% p.a. over ten years. This includes the fund charges but not our fees and platform charges.
How do we test these figures?
We follow the BlackRock Capital Market Assumptions https://www.blackrock.com/institutions/en-zz/insights/charts/capital-market-assumptions
These outline the long-term asset return expectations. The current return expectations for the portfolios are:
| Return | |
| Cautious Portfolio | 6.52% p.a. |
| Balanced Portfolio | 6.78% p.a. |
| Moderately Adventurous Portfolio | 7.11% p.a. |
| Adventurous Portfolio | 7.34% p.a. |
Would we review the expectations?
Yes, if the market expectations for returns reduced then we would reduce our long-term return profile. We review this quarterly and although the long-term expectations have come down, they are still within the 6% to 8% target.
Do we guarantee a return of 6% to 8% p.a. over a ten-year period?
This is our stated aim. We do not guarantee this. The challenging market environment since 31 December 2021 has meant that we have missed the 6% target for the Cautious Portfolio. The table below only shows the portfolios with a ten-year track record.
| 10-years (p.a.) | Since launch (p.a.) | |
| Cautious Portfolio | 5.22% | 7.60% |
| Balanced Portfolio | 6.10% | 8.35% |
| Moderately Adventurous Portfolio | 6.42% | 8.67% |
| Adventurous Portfolio | 6.62% | 8.85% |
Why do we have a benchmark?
The benchmark is a measure of performance vs a basket of passive funds. Passive funds follow a particular index. Our fundamental aim is to deliver a return of between 6% and 8% p.a. over a ten-year period. In doing that over the same period we should also outperform this basket.
In the short term there will be periods where passive funds outperform, particularly in periods of extreme market volatility.
The table below shows performance vs the benchmarks over a 5-year period, 10-year period and since launch.
| 5-years (p.a.) | 10-years (p.a.) | Since Launch (p.a.) | |
| Cautious Portfolio | 2.61% | 5.22% | 7.60% |
| Benchmark | 1.52% | 3.78% | 5.14% |
| Balanced Portfolio | 1.63% | 6.10% | 8.35% |
| Benchmark | 2.34% | 4.50% | 5.81% |
| Moderately Adventurous Portfolio | 1.51% | 6.42% | 8.67% |
| Benchmark | 3.46% | 5.74% | 6.73% |
| Adventurous Portfolio | 1.16% | 6.62% | 8.85% |
| Benchmark | 3.74% | 6.14% | 6.93% |
How do we measure performance?
Portfolio Level
We have several touchpoints when monitoring performance:
- We monitor performance monthly.
- We have an internal monthly investment risk matrix. Within this we monitor the target return, and compare the performance to a range of discretionary managed portfolios.
- On a quarterly basis we update the website with performance data and provide updates.
- From September to February, we carry out a comprehensive review of the portfolios and rebalance on 1 July each year (subject to your approval).
The primary focus of this work is to understand periods of underperformance and adjust where we see appropriate.
As an example, we increased exposure to fixed income (debt) in 2023 to reflect higher interest rates, and a more conducive environment for these types of investments.
Fund Level
As a minimum we look to review all the funds within the portfolios once a year. We write up the notes from these reviews and these are available on the website.
Although we consider longer term performance, we also look at short term performance to understand the reasons for any underperformance or sudden spike in performance. We may change the strategy where we feel that there is a long-term shift in the environment, where we feel the investment will no longer be appropriate, if there are better opportunities, or where there has been a significant change to the operation of the strategy.
As an example, with higher interest rates the availability of cash will naturally be limited meaning companies needing cash to develop will find it harder. We have therefore increased our exposure to “quality” and reduced our exposure to strategies which carry higher risk with more innovative, and cash poor companies.
Charges
The performance data includes the fund charges but not the platform and LWM fees. Fees are fully disclosed. Below are the fund fees as of 31 August provided by Trustnet.
| Fund fees | |
| Cautious Portfolio | 0.74% |
| Balanced Portfolio | 0.80% |
| Moderately Adventurous Portfolio | 0.89% |
| Adventurous Portfolio | 0.90% |
| Cautious Positive Impact Portfolio | 0.94% |
| Balanced Positive Impact Portfolio | 0.91% |
| Adventurous Positive Impact Portfolio | 0.91% |
| Income Portfolio | 0.99% |
| Positive Impact Income Portfolio | 1.06% |
We review our charges within the Consumer Duty Fair Value Assessment. We also disclose under transparency on the website.
Performance
You should note that past performance is not a reliable indicator of future returns and the value of your investments can fall as well as rise. LWM only invests in UK based investments although some funds / assets may have overseas holdings, the performance of funds / assets where some holdings are denominated in foreign currencies will also be subject to variations in currency rates.
Factsheets
These factsheets are provided by third parties for information. LWM is not responsible for these factsheets, has not reviewed them, and accepts no liability in connection with your use of them or any of their content. These factsheets display the fund manager’s standard retail charges and please note that product charges and fees may replace the charges displayed.