You will be aware that we have moved on quickly from being in a world which was beginning to successfully emerge from the Omicron virus, with the year ahead looking positive, to over the last month the reprehensible Russian invasion of Ukraine which has triggered a significant change in narrative for investors, central banks and governments, with falls across most markets.
Our clients’ portfolios of course are not immune to these market forces, and have been incurring volatility and falls so far this year. Of course, volatility is not an unusual characteristic of markets, particularly at times of heightened geopolitical and economic uncertainty.
Under FCA guidance it is our responsibility as firm to notify our clients when the overall value of your portfolio depreciates by 10%.
As a company we have taken the stance to make our clients aware if any of their individual component accounts (within their portfolio) depreciate by 10%, even if this means the overall portfolio has not reached the 10% drop. This can sometimes mean that the reports issued focus on one particular part of an overall portfolio and wealth jigsaw, rather than correctly representing the broader overall picture which may actually be less volatile. Further, when significant flows of money move either in, or out, of accounts, this can also have an impact on the short-term volatility reports that are issued.
If you receive a portfolio volatility communication, it should not be seen as a trigger to take action but be aware that portfolios are experiencing short-term volatility – as above, a common trait of long-term investment.
Please feel free to discuss any questions you have with your Wealth Manager, but rest assured we are keeping a close eye on all our clients’ investments and looking to manage them as best we can in these difficult conditions. Our discretionary investment powers and the active approach to investment within funds we hold offers the opportunity for us to reposition portfolios as we see the situation develop.
Clients’ broader financial strategies put in place through our financial planning process should allow clients to cope with market volatility, whilst retaining the longer-term potential for better returns. If volatility persists, then discussions with your Wealth Manager may be useful to see how your financial planning strategy should adapt to cope with this. We will discuss this with you in our regular review meetings.
If you wish to check the value of your investment please log onto your SG Wealth Personal Financial Portal account or your investment platform account. Alternatively, if you don’t have online access then please contact us.