The five pillars of our investment philosophy

Culture, specialist expertise and a robust structure are key to building and managing our portfolios, and these principles come to life through the work of our Asset Allocation Team, which applies its technical know‑how every day to the complex processes that shape our investment strategy.

Yet behind the technique, equally important, lies our investment philosophy. Our founding principles guide the rigorous, research‑driven work of our experts in building portfolios designed to help each client achieve their goals and feel confident, even in uncertain times.

Here are the five pillars that guide our approach.

1. Focus on asset allocation

According to a study in the Financial Analysts Journal, nearly 90% of a portfolio’s long‑term performance variability is driven by asset allocation and diversification, while market timing plays a minor role.  

We share this view: asset allocation – the balance of asset classes such as equities, bonds, and commodities – is, in our belief, the primary driver for the potential of long‑term returns.

That’s why we prioritise broad market segments, analysed within the global macroeconomic context, rather than individual stocks or companies. This approach is more resilient, less affected by short‑term noise, and better positioned to create lasting value even though we understand that this can’t always be the case.

If you’d like to learn more about how our asset allocation process works, you can read our story here.

2. Risk management

We don’t aim to “beat the market”; our focus is on creating portfolios that stand strong through the most challenging times.

There is no return without risk, but risks can – and must – be understood, measured and managed. That’s why we constantly monitor volatility, carry out scenario analyses, assess correlations between assets, and ensure every portfolio remains aligned with the investor’s profile to help manage some risks.

3. Long‑term horizon

Financial markets can be unpredictable in the short term. News, macro data and political events often generate fluctuations that risk distracting investors.

We believe staying the course is the best possible competitive advantage. Remaining invested over time, with discipline, allows you to benefit from market growth and the compounding effect, whilst understanding that the capital is at risk. That’s why we design portfolios to support clients throughout their entire journey – even during difficult times.

4. Low costs

Over time, even a few tenths of a percentage point can make a big difference. That’s why one of our fundamental principles is to keep costs low, without compromising on quality.
We use efficient instruments such as ETFs and ETCs, selected through a rigorous process, and adopt a long‑term approach to avoid unnecessary and costly transactions. In a climate where future returns may be lower than in the past, every pound saved on costs is a pound that stays working for the client. In this framework, portfolio rebalancing plays a crucial role.

To learn more about how we select instruments to optimise costs, you can read our detailed article.

5. Focus on investor goals

Every Moneyfarm portfolio is designed to help investors reach their goals – whether it’s boosting a pension, saving for children’s university fees, or protecting their wealth.
Our process begins with a thorough assessment of the investor’s profile: risk tolerance, loss capacity, time horizon and financial experience. 

Alongside this comes the support of a consultant, ready to step in at key moments to prevent impulsive decisions and ensure the strategy remains aligned with real needs.

Investing with Moneyfarm means relying on a structured, transparent, long‑term strategy. It is not the markets that set the course, but the goals of those who entrust us with their savings – and it’s on those goals that we build stability and value over time.

Investments in financial instruments are subject to market fluctuations and may result in the partial or total loss of the capital initially invested.  Past performances aren’t an indicator of future returns.