Driven by evidence, rooted in behaviour, made for real life
Investing must be rational; if you can't understand it, don't invest.
Warren Buffett
No guesswork. Just science and behaviour.
Financial success is rarely determined by picking the perfect investment or predicting what markets will do next. More often, it comes from making consistent, well-informed decisions and avoiding the emotional mistakes that can derail even the best-laid plans. That's why our approach is built on both academic evidence and behavioural finance, combining proven research with an understanding of how people actually think and act when it comes to money.
We don't rely on speculation, market forecasts, or the latest headlines. Instead, we focus on the principles that have stood the test of time: disciplined investing and evidence-based decision-making. You can't time the market or pick stocks, but you can improve your risk-adjusted returns.
What is evidence-based investing?
It is a process of systematically reviewing, appraising and implementing academic research findings to help deliver the best investment solutions for investors. It is based on passive (index) investing, low cost, and the use of factor investing.
The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
William Arthur Ward
Our investment philosophy follows nine guiding principles
Optimism
Optimism about the future. The market as a whole will continue to deliver long-term value, as it always has. Capitalism works.
Patience
Patience. Once money is invested, we keep an eye on the long term rather than on what markets are doing today or may do tomorrow. We do not make short-term forecasts.
Discipline
Discipline. Delivered through careful asset allocation, diversification, and rebalancing your portfolio to keep it in line with the course set.
Costs matter
Markets are efficient most of the time. As a result, beating the market tends to be hard once costs are considered, and high investment costs are one of the quickest ways to erode capital.
Factor inesting
The best way to improve investor performance is by using evidence-based factor investing.
Market overshoot
Periods of extreme under and over valuation occur from time to time because of investor behaviour. Market returns have a left-tail skew, and large losses can occur in the short term.
Cycles and psychology
Understanding economic cycles and the psychology of market participants matters.
Losses hurt
Aversion to losses is real and strong. People do not like losing money.
Timing fails
Timing the market does not work.
Timing the market does not work
Market timing is the art, or perhaps the illusion, of predicting the future. While it sounds appealing, even seasoned professionals struggle to consistently get it right. Markets are influenced by countless unpredictable factors, from geopolitical events to sudden shifts in investor sentiment.
Ultimately, your objective is to achieve the real return identified through financial planning, while taking as little risk as possible.
Diversification
Diversification results from the relationship among holdings within a portfolio. Because those relationships matter, portfolios concentrated primarily in traditional stock and bond exposures may not fully capture the potential benefits of diversification.
This is especially true in periods like this one, when stocks and bonds are positively correlated. The correlation has been around 0.65 so far in 2026. From 2000 until 2021, equities and bonds were negatively correlated and offered diversification. That changed from 2022 onwards. Correlation has become positive and, worse, it has recently increased.
Investors in volatile assets have two important decisions to make.
01
How much risk do I take?
We answer the first question when designing your financial plan. In short, it depends on your time horizon, your financial objectives, and your ability and willingness to tolerate risk.
02
How do I allocate my risk?
The answer to the second is that we should allocate your risk in a way that produces the greatest return for the risk taken.
Conventional wisdom says aggressive investors should prefer stocks and conservative investors should prefer bonds. In reality, aggressive investors should prefer a larger exposure to a well-diversified portfolio of stocks, bonds and diversifiers, which are alternative sources of risk. A conservative investor should prefer a smaller exposure to that same well-diversified portfolio, plus some cash. This way every investor, regardless of their risk tolerance, achieves a higher level of absolute return.
The best portfolios allocate risk most efficiently, which means they are the most diversified, which means they produce the greatest return per unit of risk, which means they produce the highest return for the risk you agree to take.
What is a good diversifier?
There is a common misunderstanding about diversification. Diversification lowers risk, but it does not improve returns. A good diversifier is one that lowers risk faster than it lowers expected return, which means it improves your risk-adjusted returns. If you need to increase returns you have to apply leverage, which we do not recommend to retail clients.
Equity market risk dominates most portfolios. Take the standard 60/40 stock and bond portfolio, represented by 60% MSCI World Index and 40% Bloomberg Barclays Aggregate Bond Index. Between 80% and 90% of the risk in that portfolio is equity market risk, so a good or bad year for stocks almost always tells you whether it is a good or bad year for the portfolio. As correlation has become positive, equity market risk in a 60/40 portfolio reaches 90%. The rest is inflation and interest rate risk.
There are several diversifiers, also known as alternatives, which can be considered: private equity including infrastructure, private credit, equity market neutral strategies based on equity factors, and trend following. Bitcoin is not an investment, but because some people are drawn to it we have included it below. Gold bullion is not an investment either, though some people wrongly consider it one.
Building a more robust portfolio when stocks and bonds are positively correlated means looking for asset classes and strategies that are highly diversifying to stocks. That is the same goal as when stocks and bonds are negatively correlated.
While correlations tell us something about how strongly prices move together, beta gives a better sense of how much equity risk something carries. Beta has a simple definition: an equity beta of 0.5 means that for every pound allocated to the asset, you get about 50 pence of equity exposure, in addition to whatever other sources of return that asset provides.
The table below shows the correlations and beta for other assets. Bonds have posted a positive correlation with equity markets, and their equity beta of 0.2 means every pound allocated to bonds has effectively given an additional 20 pence of equity market exposure.
Relation to equities (MSCI World Index)
Five years to 31 July 2026
| Correlation | Beta | |
|---|---|---|
| Bonds | 0.57 | 0.20 |
| Private credit | 0.77 | 0.71 |
| Private equity | 0.79 | 0.83 |
| Gold bullion | 0.06 | 1.45 |
| Bitcoin | 0.53 | 2.09 |
| Equity market neutral | 0.18 | 0.02 |
| Trend following | −0.28 | −0.22 |
Source: AQR, Bloomberg
Style premia
A systematic equity market neutral fund tries to separate equity factor premiums from the market return, offering exposure only to the equity factors: value, momentum, profitability, carry, small cap and defensiveness.
Trend following has been researched and tested over a long period by academics using a broad array of liquid assets: equities, bonds, commodities and currencies. It has also been shown to help when it is most needed, during protracted equity drawdowns.
Our choice was to combine market neutral with trend following, using funds that draw on economic trends rather than chart trends alone. We prefer an integrated solution. These funds tend to be known as style premia and invest in long and short portfolios of equities, bonds, commodities and currencies. Allocations tend to be around 15% in our portfolios, replacing bond exposure.
Our style premia implementation uses funds that provide diversified exposure to four investment styles.
Value
The tendency for relatively cheap assets to outperform relatively expensive ones.
Momentum and trend
The tendency for an asset's recent relative performance to continue in the near future.
Carry
The tendency for higher-yielding assets to provide higher returns than lower-yielding assets.
Defensive
The tendency for lower-risk and higher-quality assets to generate higher risk-adjusted returns.
For style premia funds we target a Sharpe ratio of 0.7 with 8% volatility. At an interest rate of 3.5% a year, that implies a return of around 9.4% a year, with 50% to 66% less volatility than equities and a very low, if not slightly negative, correlation.
Peak to trough drawdown
Beyond improving returns per unit of risk, a highly diversified portfolio reduces drawdowns during equity market declines. That helps investors stay comfortable over the twenty-year horizon that truly matters, often the ten years before and ten years after retirement.
Market downturns expose the limits of relying on stocks and bonds alone. No strategy works in every environment, but history suggests trend following has frequently provided a different source of return when investors needed diversification most.
Research covering more than 130 years of market history found that a representative time-series momentum strategy generated positive returns during eight of the ten largest 60/40 portfolio drawdowns. That is the main reason we use trend following in our portfolios.
Smoother performance also helps investors:
Stay invested during periods of crisis
Avoid emotional decision-making
Remain committed to long-term plans
This behavioural advantage can matter more than small differences in theoretical returns.
By helping you understand the behavioural biases that influence financial choices, we keep you focused on your long-term goals rather than short-term distractions.
The result is a financial plan that is practical, resilient and built around your life. Whether you are building wealth, preparing for retirement, or creating a legacy, our goal is to give you the clarity, confidence and structure to make better financial decisions.
(1) Factor investing is an investment strategy that selects securities on attributes which empirical research associates with higher returns. Sometimes known as style factors. It is designed to improve diversification, generate above-market returns and manage risk. The main equity factors are value, size, profitability, momentum, carry, and the minimum volatility anomaly.
(2) Left-tail skew. Skewness measures the asymmetry of a probability distribution about its mean. In a negatively skewed distribution, more values are concentrated on the right side and the left tail is longer. For investing, it means large negative returns can happen from time to time.
(3) The independence assumption underlying σ / √T is an idealisation. Real returns exhibit volatility clustering, autocorrelation and regime dependence, all of which slow convergence relative to the formula.
The value of an investment and the income from it can go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. Past performance is not a guide to future returns.
This behavioural advantage can matter more than small differences in theoretical returns.
book a call
Ready to make a plan?
Book a no-obligation call with one of our expert advisers
