Diversified
Cautious
Portfolio.

3% target rate*

Investment strategy.

The Cautious Portfolio has been created to suit investors with a low risk appetite, typically those who want improved returns over traditional savings accounts. It is best suited for first time investors.

The rationale behind the portfolio is to offer lower risk capacity clients the opportunity to generate a steady return whilst limiting their exposure to risk, but still offering a diversified selection of assets that will benefit them when markets perform well. As a result, a large percentage of the portfolio has been allocated inside the United Kingdom and in GBP.

Larger exposure to cash and treasury bonds has been included to reduce risk in the portfolio and generate a stable low risk passive income. The remaining part of the portfolio has been very well diversified across several industries and geographic sectors with only a minimal allocation to emerging markets. The assets in the portfolio have been selected in a strategy that ensures the investors is only exposed to GBP, Euro and US Dollar as the three major Western currencies.

Portfolio breakdown.

All data expressed as at 1 November 2018.

Asset weightings.

Our globally diversified portfolio comprises a mix of asset classes and investments all of which are highlighted below. Portfolios are constantly monitored and may be rebalanced by the investment manager. This allows the manager to adapt to any material market movements at its discretion and ensure the portfolios remain in line with strategic asset allocations. As such the products, assets and weightings of those products within the portfolios may change from time to time with the objective of retaining the desired portfolio construction and performance outcome. Mercantile Invest will provide regular updates of such amends which can be viewed in our archive.

Cash - 4%
iShares Core FTSE 100 UCITS ETF - 10%
SkilliShares Core £ Corp Bond UCITS ETF - 5%
iShares EURO STOXX 50 UCITS ETF - 5%
iShares MSCI World UCITS ETF - 8%
iShares S&P 500 GBP Hedged UCITS ETF - 5%
iShares UK Gilts 0-5yr UCITS ETF - 6%
iShares UK Property UCITS ETF - 5%
Lyxor US TIPS GBP Monthly Hedged UCITS ETF - 5%
SPDR S&P UK Dividend Aristocrats UCITS ETF - 5%
Mercantile Diversified UCITS - 28%
Mercantile Opportunities UCITS - 14%

Asset overview.

  • cash

    Cash is the lowest risk asset available – if denominated in sterling there would be no currency exposure risk to the client. It provides liquidity inside the portfolio and although it doesn’t generate growth, it can be used for new opportunities identified in the market.

  • commodities

    Whether related to food, energy or metals, commodities are an important part of everyday life and are a good way for investors to diversify beyond traditional stocks and bonds.

  • exchange traded funds

    Bought and sold like shares, Exchange Traded Funds (ETFs) allow access to a large range of asset classes and indices e.g. the FTSE 100.

  • equities

    Equities are units of ownership interest in a corporation or financial asset that can provide equal distribution in any profits, if any are declared, in the form of dividends. Held across global indices, equities can benefit investors both through price appreciation and yield.

  • emerging markets

    Emerging markets offer investors the potential to benefit from high growth opportunities in less developed or established regions. With more volatility there is a higher risk but the rewards can be much greater.

  • fixed income

    Fixed Income is an income from an investment that is set at a particular figure and does not vary like a dividend or rise with the rate of inflation, unless stated. Bonds are the most common type of Fixed Income Security – we seek  Investment grade corporate bonds from Blue Chip and household names, alongside UK government bonds.

  • property

    Investment in property is vast – ranging from investing in rental opportunities, to investment in property developers generating returns from building and renovations, to appreciation on rising property prices. Not to mention commercial property and the high yields that can be generated. Property provides investors with collateral in physical assets therefore overall we believe it offers good diversity inside the portfolio.

“our aim is simple – to put you and your clients’ first, so we’ll work closely with you to ensure our portfolios meet your clients’ needs”

 

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