Revealed: Top 10 UK Advisers Using ETFs

November 26, 2015

Keith Robertson

Vanguard S&P 500 UCITSTo say Keith Robertson's approach is 'risk averse' could be seen as an understatement. The chartered financial planner has not invested in equities via exchange traded funds since the first quarter of 2009—the last time, he says, the market was at or below fair value. And the entry point, says Robertson, is the only factor that will determine whether you end up with real, long term returns.

But Robertson's approach also shows a strong conviction and investment philosophy, and something that is often lacking amongst his peers—patience.

"If the overall strategy is based on always trying to buy assets at or below long term fair value, life becomes simpler and safer," he said. "There is no need to sell, except if either the client needs liquidity or, crucially, another asset class becomes available below fair value."

Robertson veers away from so-called voodoo magic, which involves taking a view on markets and coming up with an asset allocation that should fit the client's risk profile.

Robertson's preferred valuation metric is Tobin's q, which is the ratio between a physical asset's market value and its replacement value, first brought about in 1968.

"Equities now look to be well above fair value and are therefore much riskier," he said. "I can't guess tops and bottoms, because markets never fail to surprise. One can only try to judge whether it is rational to buy at any particular moment."

Without equities to make up a return, the adviser looks for alternative assets, like index-linked gilts and ground rents funds, which can deliver an "astonishingly stable" return of around 5%.

However, although Robertson firmly believes the equity premium has not been enough to justify further delving into risk-on assets right now, he always gives his clients the choice as to what to do with their capital.

"It's their money and they want to sleep at night," he said. "I will always phone them to say when equities, or any other asset class, look to be below fair value and worth buying."

Robertson says the minimum client account size does not matter to him, as the last few clients he has taken on have more been about building a relationship than portfolio size.




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