Investing & Performance | 18 April 2024

coutts' approach to investing

How we decide where to invest our clients’ money – and how it’s working out.

Anchor and Cycle. Two words that sum up the philosophy behind every investment decision we make for our clients. They represent the framework within which we endeavour to help them grow their wealth.

Here’s how it works, and how it’s served our clients so far this year.

Anchor is about the long term, the future, the next five years (at least). It’s about getting our over-arching positioning right for that timeframe. While short-term shifts in asset prices are important, it’s good to stay focused on long-term goals.

Cycle, on the other hand, is all about the present. We look at where we are in the business cycle today – how the macro-economic environment is faring – and what governments and central banks are doing. Then we see how we can make the most of those conditions.

Basically, if ‘Anchor’ is our strategic thinking, ‘Cycle’ is about our tactics.

And all this is rooted very firmly in good, hard data. We don’t play hunches. We analyse an array of data and make sound, considered decisions based on them. 

The Three pillars of our active management

With this thinking firmly front of mind, our day-to-day decision-making comes down to three things:

  • Taking risk where we believe it’ll be well-rewarded – all investing comes with risk, even not taking a risk is a risk. We have a framework in place to help ensure we take ‘good’ risks – those likely to be successful.
  • Diversifying our investments – we do this to try to pre-emptively manage any losses within acceptable limits. After all, we are all about capital preservation, which is critical for many of our clients.
  • Exploiting market shifts – markets are often irrational in the short run and can change fast, which can present the best opportunities. We’re ready to take advantage of that.

Our investment performance this year

Enough talk, more numbers. How has this approach been working for us? As it happens, at this point, pretty well across our investment products. For example, all our sterling discretionary portfolios have turned in top quartile performance over the past year, as of 31 March. That means they’re among the top 25% of their peer group.

Here’s how a typical balanced sterling portfolio has performed compared to its peers. This portfolio includes a mix of the various assets we invest in and is therefore a good representation of our house view. For greater context, you can see how all our discretionary portfolio service sterling mandates performed over the last five years in the table at the bottom of this page.


Discretionary Portfolio Service – Sterling Balanced Portfolio Year-to-date March 2023 to March 2024
Coutts Peer group Coutts Peer group
4.7% 3.0% 11.7% 7.3%

Source: Coutts, ARC, 31 March 2024


Past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can fall as well as rise and you may not get back what you put in. You should continue to hold cash for your short-term needs.

what's behind our current positive performance?

A healthy US economy has fuelled improved company earnings and good stock market performance. And meanwhile, we’re starting to see broad improvements in the UK and Europe.

At Coutts, we were well-positioned for America’s economic resilience, having increased our investment in stocks over bonds. We’ve invested predominantly in global stocks, largely made up of US companies. Conversely, we have a lower investment in UK stocks, which has supported our performance as UK company earnings have been more challenged.

We also added high-yield bonds, which tend to perform well when the economy expands and have been supported by interest rates peaking. We’re benefitting from attractive yields from this asset class. In addition, we bolstered diversification by adding gold, which has potential to help insulate our investments from geopolitical and other risks.

Coutts’ Head of Multi-Asset Portfolio Management Monique Wong says, “Right now, the US economy is healthy, stock markets are solid and investors are feeling confident. Our positioning has leaned positively into these conditions since late last year, and we’re seeing that reflected in our performance.”

She adds, “Risks remain though and, as always with investing, there’s absolutely no room for complacency. We therefore continue to keep a close eye on market developments so we can adjust our positioning accordingly and in good time, should the economic and market backdrop change materially.”

Our performance in more detail

Discretionary Portfolio Service  - Sterling

12-month returns as percentages to end of last quarter


Fund March 19 – March 20 March 20 – March 21 March 21 – March 22 March 22 – March 23 March 23 – March 24
Defensive Portfolio -1.6 6.6 -1.8 -8.0 7.9
Cautious Portfolio -3.4 10.5 -0.3 -7.2 10.0
Balanced Portfolio -4.6 16.0 2.6 -5.5 11.7
Ambitious Portfolio -9.0 28.1 6.4 -3.9 14.4
Adventurous Portfolio -12.7 34.9 9.2 -2.4 15.4
Managed Equity Portfolio -14.2 36.4 10.2 -2.3 16.5

Source: Coutts, 31 March 2024

Return data for funds are calculated net of fees, in sterling and assumes reinvestment of dividends.

ARC peer group data represents consolidated performance of similar investment strategies sourced from more than 50 discretionary private client portfolio managers; ARC PCI data for the latest month, and therefore all cumulative periods, are its estimates.


Past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can go down as well as up, and you may not receive the amount of your original investment. Cash savings are generally regarded as being safer than investments as they normally grow with the addition of interest. Investments have the potential for growth and should be held for the medium to long term, whereas cash savings are usually easier to access in the short term. This article should not be taken as a recommendation or advice.



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