As a stockbroking and wealth management firm our Investment Managers have regular contact with the country's leading fund management groups. It is difficult for a single fund management group to have sufficient expertise across all sectors and geographic areas. So we research which fund managers are best in each particular area and “cherry pick” the best for you.
The Pilling Ideal Portfolios (PIPs) are six portfolios of funds carefully selected by our Investment Managers. These are the:
- Income PIP
- Growth PIP
- Higher Income PIP
- Select Opportunities PIP
- Overseas PIP
- Conservative PIP
When selecting a fund or trust it is essential to know:
- The fund manager and his ability
- The portfolio strategy both current and looking ahead
- Sector and/or geographic weightings
- Tracking error, where applicable, and volatility
- Gearing strategy (for investment trusts only)
- Discount/premium situations (for investment trusts only)
- Currency hedging strategy for overseas fund
We continually monitor these points by having regular meetings and dialogue with managers.
The PIPs can be bought in your Pilling ISA & SIPP portfolios. They can also be bought via a Pilling Nominee Account. Due to the spread of investments we suggest the minimum investment should be £20,000 per PIP. You may add further money to the PIP later if you wish providing it does not breach any contribution limits for ISAs and SIPPs.
PIPs are only available on a discretionary basis which means that we make changes to the portfolio when we think it best to do so. You will be sent contract notes when any changes are made and we provide you with a full report on the progress every six months.
Changes may be prompted by:
- An underperformance within a sector
- A sector falling out of favour
- A change in the management of the fund
- A change to the economic environment
The Management and Monitoring of our PIPs
Our PIPs are managed within our Investment Management Department where our five managers collectively have over 100 years of portfolio management experience. This is important since it means that between them they have experience of all kinds of markets.
In addition they have experienced a diversity of economic and monetary conditions from the hyper-inflation of the 1970s to the near deflationary level now; from the 17% Bank of England minimum lending rate of the early 1980s to the all-time 0.5% low now; from monetary tightening and credit restricting periods to the current period of loose monetary policy and quantitative easing.
These changing economic and monetary conditions have shaped the way the markets and individual sectors have performed. In order to have optimised portfolio returns investment managers must have been able to have read the runes in order to plot a successful course.
Within our PIPs we use collective investments – unit trusts, OEICs and within some models, investment trusts. With a proliferation of funds to choose from however, great care has to be taken to select the very best and ensure that those selected remain optimal in terms of performance. The vast majority of funds are run more for the benefit of the fund management groups than investors.
In order to ensure that the best of breed of funds are selected we have direct access to the managers via meetings and regular telephone and web dialogue. We do not simply look at the performance track records that the managers have achieved, we analyse how such performances have been achieved and assess the probability for them to be sustained.
We look at each manager’s ability to read market trends and examine their top down approach. Of perhaps greater importance is to examine their stock picking ability. We like to deal with managers who have the ability to understand company accounts and who can identify instances of ‘creative accounting.’
Over the course of a year we have a very large number of meetings and webcasts with fund managers and specialist analysts and this enables us to sustain outperformance and to cull the very small number of funds that may threaten to let us down.
A point worth stressing is that since Pilling & Co is not one of the mammoth sized players in portfolio management we are able to take advantage of the few small funds managed by successful boutiques that have the ability to significantly outperform. Asset managers who look after billions have to overlook these since they cannot obtain sufficient exposure to cover all of their clients. Many investment trusts are being overlooked by big name asset managers for this reason and this gives us a significant advantage.
We have had great success with our PIPs since 2001 when the Income and Growth models were launched and we continue to make every endeavour to keep such performance going.