Brooks Macdonald International stands out among the many investment management services providers available to investors. With a global reach, they cater to professional advisers, trustees, and private clients worldwide, operating from their offices in the Channel Islands and the Isle of Man. Their core strength lies in delivering personalized and risk-managed investment strategies, tailored to encompass a diverse range of assets or focus on a single asset.
Beyond their traditional investment management offerings, Brooks Macdonald International goes the extra mile by providing comprehensive financial planning services. They place a special emphasis on pensions and efficient structuring solutions, assisting private clients in navigating the complexities of wealth and investment management challenges.
Clients can access the array of solutions offered by Brooks Macdonald International through various channels, including pensions, trusts, and insurance products. This extensive range of options ensures that individuals can select the most suitable framework that aligns with their specific needs and goals.
At the heart of their approach, Brooks Macdonald International aims to deliver customized solutions to their clients by harnessing their collective expertise in investment management and financial planning. By leveraging this experience, they strive to empower individuals with the tools and strategies necessary to achieve their financial objectives. In this article want to go over some of the funds and see if they are worth investing in for international clientele.
Brooks Macdonald offers a range of investment solutions through their Brooks Macdonald International division. These solutions include International Investment Funds and International Multi Strategy Funds designed to cater to different investor preferences and risk profiles.
The International Investment Funds consist of three Fixed Income International Investment Funds (IIFs). These funds are built using a rigorous bond-selection process, focusing on reliable issuers, monitoring credit trends, and identifying competitively priced securities. The funds compare securities from different issuers and capital ranks in terms of valuation, taking into account factors such as interest rates, term structure levels, corporate bond valuation, and the need for diversification.
The High Income Fund is one of the offerings, aiming to generate high income by investing in diversified fixed-interest assets. This fund targets dividends above short-term sterling interest rates, although it may gradually lower share capital value unless bond prices rise. It limits exposure to non-government bond issues and can invest in bank deposits and money market products. The Sterling Bond Fund, on the other hand, focuses on sterling fixed-interest securities to provide stable income. It primarily invests in UK non-resident securities and may also hold money market instruments or bank deposits.
The Euro High Income Fund invests in euro-denominated fixed-interest instruments to generate continuous and high income. It follows a similar investment policy as the High Income Fund but focuses on euro-denominated assets.
In addition to International Investment Funds, Brooks Macdonald International also offers International Multi Strategy Funds (MSFs). These funds are strategically diversified across various asset classes and securities, including international and thematic equities, fixed income, and alternative investments, according to defined mandate parameters. The MSFs cater to different investor risk profiles and allow investors to align their investments with their preferred strategies.
The Cautious Balanced Strategy within the MSFs prioritizes safety over high returns by diversifying investments among various vehicles, with a focus on fixed-interest instruments. The Balanced Strategy aims to balance fixed-interest securities with growth-oriented funds to stabilize the portfolio. The Growth Strategy helps investors mitigate risk by diversifying across multiple asset classes, geographies, and currencies. The High Growth Strategy allocates capital to a collection of funds, primarily focusing on equities, to provide higher growth potential.
Investors should note that investment values and income may fluctuate, and past performance does not guarantee future results. Exchange rates can also impact investment value. Each strategy within the International Multi-Strategy Funds has different minimum investment requirements, as well as annual and upfront charges.
Brooks Macdonald Growth Fund Performance Analysis (all date from 1st July 2023 source Trustnet)
As you can see from the images below the performance of the growth fund only just outperformed the benchmark. While if you were to go into a passive equity fund such as the Vanguard life strategy 100 it would have over doubled the return over the same 5-year time period. On the latter, you would be paying nearly 75% less fees.
Vanguard life strategy 100
Past performance is not an indication of future performance and one could argue that most passive equity funds would have beaten active managers in the last 15-year bull run. Now we are presently in a more challenging economic period it could be time for fund managers to justify the fees.
On the plus side, the fund does seem to have some good holdings being a fund of funds. With funds such as Fundsmith, Guinness Global equity income being some of the most popular and relatively successful in performance over the last 5 years. This goes for most of the funds with BM growth holdings. The funds seem to be well selected on merit and done so well.
However, if you are to get critical would question why a growth fund has 22% allocated to U.K. equities?
Unless I missing something I would not want to be in U.K equities for growth over the last year alone most of the tech companies within the U.K have opted for listing on the U.S rather than the LSE and the U.K largest tech company Sage is so small Microsoft creates a company the size of it ever month so why would a so-called growth fund have such a large weighting towards the U.K?
AI/Technology and other growth sectors will be in 2 regions I personally suspect over the next few decades U.S. and China. For this reason alone am in the consensus that you have better growth funds on the market.
Looking generically over the range of BM funds
It only seems to show that just over half of BM funds are rates higher than 3 stars on the Morningstar rating system (not that I would read too much into this). While, out of its 125 funds only 29 have a Morningstar rating of over 3 with an ongoing fee of 0.5%-1%, which I would deem acceptable for an active manager.
Conclusion
Brooks Macdonald seems to have good enough funds to do a job and personally, I don’t see much at all wrong with them. But, at the same time am not excited by them either. Research on the funds on several fund comparison sites shows that you have just as good funds (based on the performance of 5 years) with fewer fees in the passive sector and substantially more in the active sector.
While I don’t see anything wrong with being in these funds as part of your portfolio. I would personally look for alternatives that
- Cheaper
- Had a better past performance or rating. Past performance is not an indicator of future performance.
If you have any questions, please contact me using the button below. some other reviews on funds, platforms and other investments are:
