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In this section
  • Our approach
  • Our process
  • Our reporting

Our approach

At Heartwood, our multi asset strategies provide a convenient and cost-effective access to a diverse range of asset classes, including shares, bonds, property and alternatives through a single portfolio. Having a blend of different types of investments in a portfolio helps to manage the fluctuations that occur in financial markets. 

Each of our strategies has a target return benchmark and aims to deliver a positive real return (that is, after the effects of inflation are removed) over a rolling five-year period.


Our benchmarks are simple, forward facing, inflation-linked and based on the consumer price index (CPI). They are tailored to a specific risk profile, which means that they aim to produce returns based on the amount of risk that an investor is willing to take. Each strategy therefore has a different mix of assets depending on whether it is high or low risk. Benchmarks are net of our charges.  

In addition, we set a level of drawdown/loss for each of our strategies that we believe could realistically be maintained, and if achieved, could result in a lower level of drawdown than individual asset classes during times of market stress. This is managed within a robust risk management process focused on protecting client assets by aiming to minimise portfolio losses through drawdown.

Our benchmarks are simple, forward facing, inflation-linked and based on the consumer price index (CPI).

We have a highly flexible investment approach with the freedom to invest in a variety of assets from anywhere in the world. Our actively-managed funds are designed to respond to investors’ different preferences for expected risk and potential return outcomes. Whatever the market environment, our aim is to smooth the investment journey.  

Strategy range

We concentrate our expertise on a focused range of investment strategies: Total Return, Sustainable and Income. In our experience, most people’s investment objectives and risk tolerances map very closely to one of four broad categories.

At Heartwood, we label these categories Defensive, Cautious, Balanced and Growth. For each, we have an investment strategy that seeks to deliver a return at or above a set target level.

Our global multi asset strategies can be accessed in a number of ways. The most popular route is through our multi asset funds. These funds are efficient and have a number of benefits, including the absence of VAT on the annual management charge, and deferred Capital Gains Tax while fully invested. We also offer segregated portfolios (with minimum investment requirements) for those who prefer this structure.

Our process

Our investment process is largely driven by top-down considerations.

We have a multi-layered approach to investing, based on geography, sector, theme, style, capitalisation and currency, and look for undervalued areas which we believe will offer long-term opportunities.

We have a three stage investment process:

- Long-term asset allocation (strategic)

- Adjustment of the asset allocation based on market conditions (tactical)

- Portfolio implementation (investments)


Strategic asset allocation

- Analysis of the past and future performance across all major asset types.

- Analysis leads to a framework of blended investments aimed at achieving our long-term investment goals.

- Blend achieves diversification across asset types, regions and styles and reflects our accepted risk/reward targets.


Tactical asset allocation

- Funds can deviate from the strategic framework to represent our highest conviction views on different markets, economies, asset types and sectors.

- These tactical adjustments focus on our outlook for the 3-12 month period ahead and incorporate our focus themes and ideas.

- Tactical asset allocation enables us to rebalance the investment assets in our portfolios according to current and anticipated market conditions. This means that we can make adjustments in times of market stress to potentially limit losses (although not guaranteed), while picking the best opportunities to take advantage of rising markets, with the combined aim of achieving our real return objectives.

- The degree of variation will depend on a number of factors, but we do not set any maximum or minimum limits for each asset class. It is the overall risk of the portfolio and the contributors to that risk that is monitored closely, to ensure that each strategy is run in a manner consistent with its mandate.


Instrument selection

- Our research identifies target investments, which all undergo qualitative and quantitative due diligence before being submitted for internal approval so that our best ideas are captured in the portfolios.

- Active risk controls ensure our portfolios are managed within their mandates.

Our reporting

In 2018, we launched a new online Client Centre for customers, offering access to market-leading digital reporting, which we believe sets us apart from the rest of the asset management industry.


Our aim is to offer solutions that meet the high expectations of our customers, complementing the level of service they receive personally from their client directors. 

Dynamic Client Centre provides round-the-clock access to client portfolios via desktop, tablet and mobile devices. In addition to portfolio valuations and investment reports, clients can access daily performance analysis together with insightful commentary on each of Heartwood’s investment strategies.

Round-the-clock access to client portfolios via desktop, tablet and mobile devices.

To find out more and see Clear Thinking in action, get in touch