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Track record
We have a long track record of producing superior risk-adjusted returns. This has been in part due to consistently identifying managers who outperform their benchmarks.
We use our proprietary Factor Model to disaggregate the returns of our potential third-party managers.
- At Saltus, we harness our bespoke Factor Model to systematically identify managers whose returns can be attributed to skill.
- We believe manager skill does persist in financial markets, and our investment team is continually searching for managers who demonstrate this.
- We look for managers where outperformance has been consistent, to try to ensure the outperformance isn’t down to luck.
We can measure the excess return generated by each manager we use over their benchmark and compare it to the costs of investing with that manager. For our middle risk band portfolio the ‘Saltus MAC Balanced (PA)’ , the results over the last 7 years are summarised in Chart 1 below.
On average, the extra cost of 1% per annum for using active managers has been paid for by outperformance of 2.2% per annum. Over the last 7 years, we added 8% through using active managers, net of their fees.
Chart 1: Manager Excess Return vs Cost
Source: Bloomberg/Saltus. Full calendar years from 2017 – 2022. Past performance is not a guide to the future. Investments do not guarantee a return, the value and the income from them can fall as well as rise. You may not get back the amount originally invested. We measure the gross excess return generated by each manager we use over their benchmark and compare it to the costs of investing with that manager. This is then multiplied by the amount of our portfolio invested with that manager at the start of each month to determine the results.
Chart 1: Manager Excess Return vs Cost
Source: Bloomberg/Saltus. Full calendar years from 2017 – 2022. Past performance is not a guide to the future. Investments do not guarantee a return, the value and the income from them can fall as well as rise. You may not get back the amount originally invested. We measure the gross excess return generated by each manager we use over their benchmark and compare it to the costs of investing with that manager. This is then multiplied by the amount of our portfolio invested with that manager at the start of each month to determine the results.
Successful active asset allocation alongside effective manager selection is key.
- If exceptional managers cannot be identified and the exposure to the underlying asset is still desirable, we will use passive funds to implement our decisions.
- Many of our asset allocation decisions within our core range would not be achievable with passive instruments. Our allocations to some alternative investments and Private Equity, for example, do not have viable passive counterparts.
Chart 2 highlights the years in which positive performance versus competitors was derived from both active asset allocation and manager excess return or ‘skill’. The peer group benchmark is the ARC Private Client Indices. More information on the benchmark can be found at the bottom of the page.
Successful asset allocation and identifying skilled managers led to outperformance of the peer group by 14.8% over the last 7 years.
Chart 2: Manager Excess Return and Asset Allocation
Source: FE Analytics/Saltus. Full calendar years from 2017 – 2022. Performance is quoted net of third-party manager fees & Saltus DFM Fee. Net Outperformance is shown versus the Balanced ARC PCI benchmark. Asset allocation is calculated as the difference between manager excess return in any given year and the benchmark return for that year. Past performance is not a guide to the future. Investments do not guarantee a return, the value and the income from them can fall as well as rise. You may not get back the amount originally invested.
Chart 2: Manager Excess Return and Asset Allocation
Source: FE Analytics/Saltus. Full calendar years from 2017 – 2022. Performance is quoted net of third-party manager fees & Saltus DFM Fee. Net Outperformance is shown versus the Balanced ARC PCI benchmark. Asset allocation is calculated as the difference between manager excess return in any given year and the benchmark return for that year. Past performance is not a guide to the future. Investments do not guarantee a return, the value and the income from them can fall as well as rise. You may not get back the amount originally invested.
Our approach has produced industry leading risk adjusted returns.
The combination of effective manager selection and nimble unconstrained asset allocation has resulted in outperformance versus our competitors.
Chart 3 provides overall discreet performance for our middle risk band portfolio, the ‘Saltus MAC Balanced (PA)’ portfolio, versus the ARC peer group. This is shown alongside the return on cash over the same period.
The Saltus portfolio achieved a return of almost one and a half times the annualised return of our competitor benchmark over a 7 year period. In real terms, this would equate to almost £75,000 when applied to a £500,000 portfolio.
Chart 3: Annual Performance vs ARC
Source: FE Analytics/Saltus. Full calendar years from 2017 – 2022. Performance is quoted net of third-party manager fees and the Saltus DFM Fee. Past performance is not a guide to the future. Investments do not guarantee a return, the value and the income from them can fall as well as rise. You may not get back the amount originally invested.
Chart 3: Annual Performance vs ARC
Source: FE Analytics/Saltus. Full calendar years from 2017 – 2022. Performance is quoted net of third-party manager fees and the Saltus DFM Fee. Past performance is not a guide to the future. Investments do not guarantee a return, the value and the income from them can fall as well as rise. You may not get back the amount originally invested.
The peer group benchmark is the ARC Private Client Indices.
What is the ARC Private Client Indices?
ARC (Asset Risk Consultants) provide an independent benchmark that assesses us against all of our competitors. We have no input on the benchmark and how the data is presented. The Indices are the only market benchmarks composed of real results from real investor accounts—a total of 350,000 investment portfolios from over 140 firms. “The Indices are the definitive guidepost for good investment performance under any condition” – ARC.
Who is included in the benchmark?
Nearly every major Wealth Manager in the UK is included in the benchmark. For a list of all the firms included, please click here.
Discover more
Investment management
We are unconstrained, multi-asset class investors with an award winning track record. The asset management team serves both institutions and individuals. This focus and experience means our UK private clients have access to superior investment solutions that are typically unavailable to retail clients.
Investment process
Our team of experts will partner with you to tailor a suitable investment mandate with an appropriate risk budget. Our Asset Allocation Committee shapes the core components of our investment portfolios before assigning capital to various asset classes through an allocation to third party managers.
Sustainable investing
We believe in responsible investment management, and so assess Environmental, Social and Governance (ESG) factors are assessed prior to making any investment decision. We then continue to work closely with third party managers on an ongoing basis to improve their ESG performance.
Professionals
Our expert investment management team has an established history of working in partnership with professional intermediaries. We help provide the support your clients may need and understand the requirements of each separate case prior to designing a suitable investment strategy.
Saltus Asset Management is a trading name of Saltus Partners LLP which is authorised and regulated by the Financial Conduct Authority. Information is correct to the best of our understanding as at the date of publication. Nothing within this content is intended as, or can be relied upon, as financial advice. Capital is at risk. You may get back less than you invested. Tax rules may change and the value of tax reliefs depends on your individual circumstances.