Rathbones provides individual investment services for charities, trustees, private clients, and professional partners. In business since 1742, we have been trusted for generations to manage and preserve our clients’ investments. Our tradition of investing and acting responsibly has been with us from the beginning and continues to lead us forward. As the UK's fourth largest charity fund manager (according to the 2020 Charity Finance Survey) we are experienced in managing charities and non-profit organisations. Key to our success are two distinct elements: investment management to meet a charity’s individual requirements, and support for their trustees and management team, as well as the charitable sector as a whole. To find out more about or services please visit our website: www.rathbones.com/charities
Our investment philosophy and process creates a strong yet flexible framework for our investment professionals to share ideas and challenge each other’s views. It’s constantly evolving, and we continue to invest in the resources required to ensure it remains robust.
We believe a long-term investment strategy incorporating an asset allocation framework is the key to providing consistent risk-adjusted returns. As a result, strategic and tactical asset allocation decisions are the basis for all portfolios and funds we manage.
We use quantitative and qualitative inputs to guide our strategic asset allocation decisions, combining in-house research and analysis with insights from specialist UK and overseas third-party strategists. This enables us to develop long-term strategic asset allocation positions and tactical and thematic ideas to capture specific opportunities.
Our approach recognises that assets behave differently in different market conditions. By dividing asset classes into three distinct categories through our LED framework (liquidity, equity-type risk and diversifiers) we are better able to control and manage risk.
Our LED investment framework supports a forward-looking approach to strategic asset allocation. It’s a unique way of reducing real risk in investment portfolios. Since 2009, we’ve divided up the various investable asset classes into three distinct categories:
‘Liquidity’ - easily tradable, secure investments such as government bonds, high quality corporate bonds and cash. These should have low levels of volatility, at least in comparison to other asset classes, and should be readily realisable even during periods of market stress. The weighting will, to a material extent, reflect your risk tolerance.
‘Equity Risk’ – assets that can drive growth which are highly correlated with, or sensitive to, the economic cycle and investor sentiment. Investments such as UK and overseas equities plus higher yielding corporate bonds are good examples. These investments should, given their more volatile and risky nature, generate the bulk of the longer-term returns of the portfolio.
‘Diversifiers’ – assets that should in theory be relatively uncorrelated to the economic cycle and aim to generate returns independent of economic and market conditions. This portion should provide further diversification vs. equities and bonds and therefore reduce the portfolio’s overall risk profile.
Key to our approach is ensuring that we combine these different categories of investments (Liquidity, Equity Risk and Diversifiers) to meet a charity’s objectives. Relative weightings will vary as different opportunities or risks arise, or if a charity’s requirements change.