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How does the Brunswick Investment Solution work?

The Brunswick Investment Solution is available in 2 versions

Version 1 for Capital Accumulation

Version 2 for Capital Decumulation

Both work in the same way but to different objectives and we follow basic investment principles

 

Version 1 - For Capital Accumulation 

 

​Many investment companies offer a suite of investments with increasing levels of risk rising from cash at risk level 1, up to a risk level 10.  Brunswick offers levels 3 to 8.

Both versions of The Brunswick Investment Solution have 3 parts which work together as the table below shows.

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1.  Managed Cash

2.  Brunswick Diversified Fund - Lower risk portfolio
 

3.  Brunswick Growth Fund - Higher risk portfolio

Our aim is to give good performance for the level of risk that the investor has selected.

Working from a base line

The base line for the risk levels for the Brunswick Investment Funds are the standard asset allocations issued by an industry recognised risk rating agency.

​For example the percentage allocated into each asset is shown for the Brunswick Diversified Fund which includes UK Equities, International Investment Grade Bonds, Property, Commodities and many other assets 

To achieve risk level 4 for the Diversified Fund the standard allocation to Global Equities is  0.00% but currently our managers have decided to hold 11.45% which can be seen after line 25.

​This is because they are actively seeking better performance and at that date did not believe the prospects for this asset class would be so good as other assets which they prefer.

Our managers must also adjust the amounts of the 30 or so investments within each fund to keep the risk level at 4 for the Diversified Fund and risk level at 8 for Growth Fund.


Blending and Reliability

As the risk levels of 4 and 8 are reliable, then blending these funds together as below will also result in reliable risk levels for 3, 5, 6, and 7.

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In Rising or Falling markets - Brunswick treat all Investors fairly

The diagram above shows each investor will get they get the risk level they have selected.

For example a portfolio with risk level 6 -

It always rises faster than a risk level 5, but slower than a risk level 7

When it falls, it falls faster than a risk level 5, but not so fast as a risk level 7.

We are able to confirm this with the independent data as in the in the scatter chart and the line chart in the linked pages.

Version 2  - Income Manager Portfolios - For Capital Decumulation 

 

Investors reach a point, for example at retirement, when they want to switch from Capital Accumulation to Capital Decumulation and draw income. Brunswick Income Manager Portfolios give them a reliable way to control this switch and provide ongoing income.

Adjusting the proportions of Managed Cash, Diversified Fund, and Growth Fund is routinely carried out by our Portfolio Administrator to maintain each client’s chosen risk level.

This also ensures that cash needed by the client on a regular or an ad hoc basis, is ready to send to their bank account.

 

Brunswick Income Manager Portfolios are designed to provide reliable ongoing income from capital.

Investors seeking regular income from capital realise they need to preserve their capital so it can generate reliable ongoing income.

This is particularly true for those starting retirement.

They are understandably cautious and seek to minimise investment risk in their capital.


Unfortunately this can lead to investors not taking enough risk to grow their capital and make it last.

Traditional options are investments such as annuities that can provide guaranteed income for life from an investor’s capital. However, the cost of meeting this guarantee can be lower income. Usually they do not provide flexibility of income and crucially there is no remaining capital after death to pass on.

Other investments such as smoothed return funds aim to achieve a set annual return or minimise the volatility the investor’s  pension drawdown fund may experience. But the cost of meeting these objectives may result in an investor missing out on growth in line with market conditions. They also suffer from opaque valuation methods and a lack of information on actual underlying investments.

 

Brunswick Income Manager Portfolios overcome these problems

 


These Brunswick Decumulation Portfolios are invested 25% into Managed Cash and 75% into Brunswick Diversified Portfolio and/or Brunswick Growth Portfolio split as shown below.

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Managed Cash is cash on deposit and is a key part of each Brunswick Income Manager Portfolio.

The design of these portfolios ensures they are a reliable way to draw income from Pensions, ISAs, Investment Bonds or General Investment Accounts over the long term.

With retirement often lasting 20 years or more, creating ongoing capital growth is vital. At reasonable rates of income withdrawal from the Managed Cash part of Income Manager Portfolios they will always hold about 5 years worth of gross income as cash.


This gives investors the confidence to choose a realistic ongoing level of risk for their capital.

Our Portfolio Administrator ensures timely payment of income from the Managed Cash is made each month. Payments may be altered at any time but advice should be taken to avoid unexpected tax especially if lump sums are withdrawn.

Monthly Reviews 

Every month, the Portfolio Administrator will review the performance of the investment element within each client’s Income Manager Portfolio, and in conjunction with our investment managers  decide whether to take profits from their investments to top up their Managed Cash to 25%.


Alternatively, if investment markets are falling, encashment will not be made to avoid selling in a falling market and losing capital value. This minimises so called “pound cost ravaging” of portfolios in Drawdown.


After making payments out of Managed Cash and then topping it up, the Portfolio Administrator will restore each Income Manager Portfolio to the chosen risk level by rebalancing the proportions of Managed Cash, Diversified Fund and Growth Fund as per the table highlighted in pink above.
 


This Portfolio Administration Service is built into both the Accumulation Portfolios and Income Manager Portfolios, and there is no separate charge for active administration of each  investor’s portfolio.

​​Please see the following examples of using Brunswick Income Manager Portfolios.

 

 

Rebalancing within Client Portfolios

 

Adjusting the proportions of Managed Cash, Brunswick Diversified Fund, and Brunswick Growth Fund is routinely carried out by our Portfolio Administrator to maintain each client’s chosen risk level.

 

This also ensures that cash needed by the client on a regular or an ad hoc basis is ready to send to their bank account.

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