To reach your long-term goals you need a portfolio that can get you there. In its simplest form, a portfolio is typically made up of stocks, bonds and cash. But the portfolio your advisor builds for you isn’t simple.
With sophistication comes the need for experienced investment professionals situated around the world, helping your advisor with access, innovation, expertise, value and time to enhance your portfolio. Managed money helps with that.
Here’s why your advisor might use managed money in your investment portfolio:
1. Access
The investment world has expanded, bringing you new, advanced options that could boost your portfolio’s growth. Examples include: emerging market stocks and bonds, growth-oriented stocks, value-oriented stocks, specialty credit securities, real assets and small/mid-cap companies.
These types of investments may be tough for your advisor to access on their own. Some investments require currency conversions, regulatory permissions/licenses and specialized market expertise. Therefore, your advisor may use managed money to remove barriers to more easily access these investment types, passing on the benefits to you.
2. Innovation
One way to access investments that are otherwise tough to access, is to simply invest in the broad market index. But often these market indices contain investments you wouldn’t really want in your portfolio. Perhaps they’re underperformers, for example. Or they may duplicate something you already hold.
Actively managed solutions give you exposure to strong businesses that are better positioned to produce high quality earnings and cashflow. This is particularly important in less-followed asset classes where markets tend to be less ‘efficient’ – which can lead to less precise pricing and other potential risks for investors. Your advisor may use actively managed funds or ETFs to improve upon broad market indices and offer a better outcome for your portfolio.
3. Expertise
Picking securities like stocks and bonds is extremely complex. The investment landscape needs constant analysis. Rapid market shifts are the norm and changes in the economic landscape are frequent.
Managed money is designed to navigate today’s market complexities. Through professional oversight managed money aims to deliver higher returns with a smoother investment experience. However, it’s important to choose the right firm to manage your money. Your advisor engages in due diligence of investment managers to ensure that a mutual fund or ETF in your portfolio is managed by experts who can deliver strong outcomes.
At RBC Global Asset Management, we offer a robust product line-up, a wide breadth of capabilities, a proven investment track record and competitive fees. We are the largest investment manager in Canada1, backed by an unmatched team of investment professionals. Our solutions can help you reach your goals so you can focus on what matters most.