Introduction

This investment portfolio is by far our most popular.  It is diverse in its approach, holding property, hedge fund strategies, stockmarket investments and corporate bonds.

With only 35% of the portfolio relying on worldwide stockmarket’s improving, this portfolio works with caution in mind. The hedge strategies employed by 40% of the funds should cushion any dramatic falls in the equity markets.  

During 2009, this portfolio produced positive growth in eight out of twelve months.  Its worst month was February, where the portfolio was down by 1.85%.  Its best month was April, where it produced 5%.  For the 2009 calendar year the portfolio produced a total of 17.5%.

We expect this portfolio to produce positive and consistent growth in normal investment conditions, whilst being defensive during downward swings.  Over a period of five years we would expect the investment to produce significantly more than a bank or building society account in normal market conditions.

Remember, you can start an online pension, investment or ISA account without any initial charges and withdraw your money (or transfer away) at anytime without penalty.

It is likely that 38% of the portfolio will be negatively affected in the event of stock market decline.

Proactive Service

Sterling Financial Services firmly believe that investors need a proactive approach to monitoring their investments.  We are here to add value.  There are certainly times where there is a clear case for altering the investment strategy or just replacing a poor performing manager.  Sterling’s investment team constantly review the underlying investments and recommend switches when and where necessary.  Historically we have made, on average, three changes a year.  We simply write to you telling you why a change is necessary and request your consent to make the alteration.  Switches are undertaken free of charge.

You can review your portfolio online whenever you like and you will receive a monthly update from Sterling confirming the progress of your investments.

Risk Warning

Past performance is not necessarily a guide to future returns and the value of investments can fall as well as rise.  Investments overseas carry the additional risk of exchange rate fluctuations.  Certain Unit Trust Funds are subject to more specific risk warnings.  Please check the fund prospectus if you are unsure.  Where a property fund is held, in rare circumstances, the manager may need to sell property/ies in order meet with investor withdrawals.  Although unlikely, this may result in a waiting period before the property fund can be encashed.  When transferring an investment or pension during the transfer process there will be a limited amount of time when your money is not invested.  This could work against you in unfavourable market conditions and conversely work for you in the event of market decline.  

Portfolio Constituents in equal proportion.

Fund name	3month	6month	Factsheet
Artemis - Strategic Assets	-6.57%	1.52%
BlackRock - UK Absolute Alpha	-3.37%	-2.27%
Invesco Perp - High Income Inc	-4.96%	-1.58%
Jupiter - Merlin Income Portfolio	-1.82%	3.28%
M&G - Strategic Corporate Bond	1.27%	5.30%
Neptune - US Opportunities	-9.64%	-2.37%
Octopus Investments - UK Absolute Equity	-14.81%	-16.55%
Premier - Global DSR	-12.48%	-6.17%
Standard Life - Global Abs Return	1.88%	6.18%
SWIP - Property	2.05%	5.42%

Tax and Charges

These investment funds are commonly known as Unit Trusts. Where unit trusts are held outside of a pension or an ISA account the growth will be taxed. In which case, the portfolio has potentially two methods of growing your money, by both capital growth and by dividend income. Tax on dividends will be subject to income tax, whilst capital growth will be subject to capital gains tax. 

Typically, before Sterling’s charge, you should expect a charge of approximately 1.11% of the value of the investment for ISA’s and Investments Accounts, whilst pension accounts are a little more expensive at 1.21%.  There are no initial charges for setting up the account for online investors and only limited initial charges for those requiring individual financial advice.  You can withdraw your money at anytime without penalty. 

Please refer to the About Sterling page for further information on our charges, which depend on whether you need face to face advice or if you are happy to purchase investments online.