A decade of Parmenion Blended Growth
A tenth birthday is a milestone worth celebrating. There’s a sense of pride and maturity that comes with reaching double digits – a perfect moment for reflection.
So, this month we're celebrating 10 years of Parmenion Blended Growth and a decade of positive returns*.
To mark this milestone, the chart below shows how Parmenion Blended Growth has performed over the past 10 years. While past performance isn’t a guide to the future, it highlights the solution’s consistency and the potential benefits of combining active and passive management over time.
*Source: FE Analytics
Launched at a point when the Managed Portfolio Service (MPS) market was a lot smaller and a lot less crowded, the solution aimed to put the active vs passive debate to one side and offer a ‘best of both’ approach to clients looking to accumulative wealth.
Why cost alone isn't enough
Today, with the intense focus on cost, it feels as though a lot of recent launches in the blended space have primarily targeted this; lowering model Ongoing Charge Figures (OCFs) by forcing in as much passive exposure as it’s possible to get away with. But while lower cost is a big pull for a blended proposition compared to a fully active one, this was never the driving force behind Parmenion Blended Growth.
We set out to find the investment sweet spot – combining the strengths of active and passive without compromise.
Jasper Thornton-Boelman
Investment Director
Parmenion Investment Management have historically managed both fully active and passive models and we have an appreciation for the benefits of both approaches. We’re happy to pay for active management – but only when it makes sense to do so.
When active management adds value
But it won’t always make sense. Some markets are just harder for an active manager to add value – the US has a lot less active outperformance than the UK, for example. But market dynamics can play a part, too. Is it a broad market, with lots of stocks outperforming, or a very narrow one, with just a few companies leading the way? These things can influence whether or not it’s worth paying a manager extra for the chance of outperformance.
Of course, we’re not blind to cost – and we’ve probably focused on this a little more of late – but we give ourselves an OCF range of around 0.30-0.40% and this offers enough scope to have a good balance of active and passive funds.
And by focusing on active managers that are truly active – with a high active share and fewer concerns about what the benchmark is doing – you can ensure there’s good potential for added value.
Keeping philosophy front and centre
Cost is just one element of our value assessment framework. By making sure our approach is broader than just OCFs, we can keep the philosophy of the solution front and centre. A blended solution should offer flexibility, and it should offer clients the best chance to meet their financial goals.
When active and passive work together, long term returns should be all the better for it. And not just because the portfolio costs less.
Want to know more?
See how our balanced approached could work for your clients. Visit the Parmenion Blended Growth page.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
