Investment Counsellor, RBC PH&N Investment Counsel
In the business
$150 million; 60 households
Active investment management can add value through a market cycle, though style biases can dominate relative performance for extended periods of time. So we include different manager styles in our portfolios. This adds diversification beyond traditional asset allocation.
We’re underweight fixed income and overweight equity, since we feel global policy initiatives support long-term economic growth; rates will ultimately normalize and corporate profits will continue to grow. Within fixed income, we’re overweight investment-grade credit and, to a lesser extent, high yield, though we’ve been tempering that exposure as the credit cycle matures. We’ve also begun rotating from credit to alternative investments. Our equity overweight is concentrated in defensive North American stocks. Finally, we’re cautiously building exposure to emerging markets.
Small and unconventional
I serve 60 households, and would like to cap it around 100. That’s because most of my clients want a full range of services. So we’ve hired lawyers, accountants and insurance professionals to provide a family office experience.
Many of my clients prefer to meet on their terms. I recently took a client skiing and we did our annual review in a private part of the day lodge afterward. Another client just bought a yacht and we held our meeting at his slip in the marina.
First foray into finance
During the late ’90s, a friend turned $10,000 into $200,000 on technology stocks in six months. I thought, “If he can do it, anybody can.” I bought just before the bubble burst and the outcome was a complete loss. That was one of my most expensive lessons, and part of why I chose to pursue the CFA charter. It also led me to embrace a team-based, consistent investment discipline. That approach can mitigate holding a concentrated portfolio of similar securities, trading excessively and doubling down on losers (with no clear catalyst for change).
Kanupriya Vashisht is a Toronto-based financial writer.
Originally published in Advisor's Edge
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