Wealth Management: Our Investment Approach – Investment Approaches

28/03/2019

Our Mosaique approach: Starting “from the top”

For the first group of clients described above, we have created an investment approach where we “start from the top”.

The name Mosaique makes reference to art made from the assemblage of small pieces that create an image that is best seen as a whole. The beauty of the overall piece is the focus but every single element is carefully selected to create that image. The name also makes reference to the rhododendrons cultivated by Lionel de Rothschild in the Exbury Gardens in the first part of the 20^th century.

Our Mosaique approach creates portfolios which can capture returns by harnessing and outperforming market and macroeconomic trends. This requires us to build liquid and well-diversified portfolios across asset classes, regions and sectors. We do this through a tactical view of the world today, tomorrow and the next 12 to 18 months: our asset allocation views.

Key to this approach is our analysis and interpretation of historic and forecast data to assess market behaviour, valuations and economic activity.

We then use equities, fixed income, cash and alternative strategies to build portfolios, remembering that each position must correspond to the big picture set by our asset allocation views.

Performance for Mosaique portfolios will be measured against a strategic benchmark. This is based on comparative industry standards and our views will then seek to generate returns above and beyond that benchmark.

To monitor our performance, we tailor benchmarks to each client's reference currency and risk profile. This allows us to track performance and position portfolios based on clients' specific investment needs.

We also use our Mosaique approach to provide clients with advisory services. This allows us to give clients our asset allocation views, so that individual transactions can work towards a clear, holistic investment picture, just as when creating a mosaic.

To conclude, the Mosaique approach offers our clients a clear, market-orientated investment approach, one which is connected to but not dictated by daily, monthly and annual economic and market trends. It is popular with wealth management clients but it is not the only way to preserve and grow the real value of wealth.

That is where our New Court approach comes into play.

Our New Court approach: Starting “from the bottom”

In 1809, N.M. Rothschild established his premises at New Court, St. Swithin's Lane London. Over two centuries, Rothschild & Co's London headquarters has stood the test of time, reflecting the family's long-term approach to wealth management.

Our New Court offering gives our clients access to a bottom-up investment approach. Returns are sought over a long-term investment horizon through the selection of assets whose fair value is higher than their current market price.

Return assets
To support our return/investment objectives, we invest in assets that increase in value over time. These we call return assets, which occupy the “growth” side of our portfolios and consist primarily of shares in individual companies or specialist equity-related funds. Their returns - and, crucially, their pattern of risks - all tend to be linked to the stock market.

Diversifying assets
To help provide some protection to the portfolios against risk, we hold what we call diversifying assets on the other side of the portfolios. These typically include cash, bonds and currencies as well as what we call portfolio protection and alternative strategies.

With our long-term approach and commitment to patient investing, we are happy to own unpopular assets. At times when others are cautious, we may be confident. In addition, when others are chasing opportunities, we may be focused on managing risks.

Our goal is to focus on a long-term investment target of inflation plus return. The rest, we view as noise.

The New Court approach offers clients a bottom-up investment strategy based on a fundamental analysis of assets' current versus intrinsic value. This gives private clients a company-focused investment approach, one which seeks long-term inflation beating returns, separate from market and macroeconomic trends.