Investing to achieve your goals
Sounds so simple, doesn’t it? And yet for many investment managers, your personal goals aren’t top of their minds.
That’s because they are aiming to achieve “relative” (or “comparative”) returns, by beating a benchmark (such as the Australian sharemarket return). If that benchmark loses money, the manager can still feel good – so long as their investments lost slightly less than the benchmark. They still ‘outperformed’, even though the client lost money!
Most investment managers still follow this approach, and there’s safety in numbers. So if a manager has done badly, it’s likely that most others have done poorly too – reducing the risk that unhappy clients will move their funds away. Their motto is “Never, ever, be wrong on your own.”
At Profile our approach is different. We don’t invest to beat benchmarks or the competition. We are a real returns focused manager, and our aim is to deliver the real (that is, above inflation) returns clients need to achieve their objectives throughout the market cycle, with a strong emphasis on reducing the risk of loss. We call this approach “Objectives-based investing”.
Profile’s approach is not new – large institutional investors such as endowment funds, sovereign wealth funds and public sector retirement schemes have followed similar principles for many years. However we think this approach is just as valid for smaller institutions and retail investors, and we apply it consistently for all our investors.
To find out how Profile’s approach works in practice, read more.