Dolfin model portfolios outperform benchmarks across most primary currencies and risk profiles
Wealth management platform Dolfin’s model portfolio saw strong performance across the board in 2019 with seven out of nine portfolios outperforming their reference indices, notably the USD and EUR Balanced portfolios which achieved a return gross of fees of 15.0 and 13.8 per cent respectively.
The Dolfin investment management team constructs the portfolios on an absolute return basis, allowing holdings to be more diversified across asset classes and geographies, and less constrained versus relative return investors.
Though equity volatility was high during 2019, the portfolios avoided much of this owing to the team’s freedom to substantially reduce equity exposure earlier in the year. Throughout the second half of the year the team was overweight fixed income and built up some of the satellite holdings in equities that sit within its thematic ideas.
The reference indices used by Dolfin are based on a target spread over inflation that differs depending on the respective risk profile: conservative, balanced or growth.
Dolfin’s macro-valuation-sentiment-technical (MVST) framework provides the structure around which the portfolios are constructed. This enables Dolfin to avoid holding equities when they appear significantly overvalued, and by employing multiple time horizons within models, the team successfully navigated the volatile markets.
Simon Black, Head of Investment Management at Dolfin, says: “We are pleased to have delivered strong outperformance for clients across the vast majority of our portfolios. Our thematic ideas all contributed to the positive performance, and our ability to adjust duration exposure within the portfolio, through the use of interest rate futures, sees us combining an institutional investment approach with private client service. We see this combination is a true differentiator.”
Dolfin will release its Q1 2020 investment outlook later this month with full details of the performance of all of its portfolios in 2019, as well as its views on what to expect from markets in the months ahead.