Performance in all market conditions. Our research methodology, developed over many years, is based upon fundamentals and proven techniques. For UK share portfolios we analyse the UK’s 350 largest companies according to our own process, a system which we call SAFER. The SAFER research process uses up to 34 assessment criteria, summarised as follows:

Statistical — current & forecast earnings per share growth & dividend per share growth

Analytical — technical/chart analysis by sector and stock

Fundamental — market capitalisation, P/E, beta, yield & cover

Emotional — qualititative assessment of risk, management and business/market, valuation

Review —consensus, PEG ratio, target price, upside/downside, recommendation

Shares

Caution, Rigour And Flexibility Over The Cycle

As Investment Managers, we are not speculative investors, but adhere to the disciplines of both value and growth investing. By this we mean that we do not believe in just one investment style, but change our policy as we go through the different stages of the economic cycle, analysing the UK Stockmarket to identify companies whose share prices do not yet reflect their true potential.

We start this process by looking at the different sectors of the market, eliminating those which we believe will under perform (relatively) on an 18-month view. We then identify the sectors which we like the most and expect to outperform on an 18-month view.

We review ALL sectors monthly to see if things have changed, and make appropriate changes as required to our investment strategy.

The next step is to look at the individual shares within each sector and eliminate all companies which do not comply with our minimum criteria, which are:

• a market capitalisation of £300 million and above
• minimum of three brokers’ coverage

We then look at each sector and apply our ‘SAFER’ process to analyse the data available on qualifying companies, formulating our own opinion on each stock: BUY, ADD (when the price is within target range), HOLD, REDUCE (take profits), or SELL. Once we have identified those we wish to buy, we set a target price for purchase and acquire as opportunities arise.

Fixed-Interest Securities

Maximising Yield, Protecting Capital

We analyse the different types of fixed-interest stocks in terms of both security and interest yield. For gilts, we analyse ‘shorts’, ‘mediums’ and ‘longs’ and look for value, taking into account interest-rate and inflation forecasts. For permanent interest-bearing shares (PIBS), we look at good quality Building Societies with strong balance sheets to reduce the risk of interest payment default. For loan stocks, convertibles and preference shares, we first look at our equity analysis and only purchase stock of companies we like in order to reduce the risk of interest payment default.

Collective Investments*

Managing Specialist Exposures

(*Unit trusts, OEICs, Investment Trusts – overseas, sector, theme, commercial property and fixed-interest funds)

We start our assessment of Collective Investments by analysing performance on two bases:

• 12-month rolling periods.
• long-term performance.

We are looking for consistent first- or second-quartile performance over rolling 12-month periods and first-quartile performance over the longer term.

The second part of our assessment is to identify funds that possess at least an ‘A’ Standard & Poors Fund Research Rating or an ‘A’ Forsyth-OSBR fund rating, in markets that we like on a medium-term view. We also favour funds whose manager has obtained a CityWire fund manager rating.

The third part of our assessment is an in-depth analysis of the fund in terms of risk profile, investment management process and style, fund manager experience, benchmarks and risk controls.

Research Systems

The Latest Best Information And Analysis

Our resources include:

1. Reuters Knowledge - web-based intelligent database, providing the latest news, comment and quantitative data, updated daily, covering over 1,300 UK companies. Includes consensus broker forecasts and recommendations, plus detailed, current and forecast earnings per share, dividend cover and sales growth data inter alia.
2. A J Bell Investment Research – internet-based research service giving access to the latest qualitative research notes on UK quoted companies published by major investment houses, with market views and commentary from various sources.
3. Alpha Terminal - real-time prices and news, plus charts and full tools for technical analysis and monitoring including instant trigger and stoploss flagging.
4. Publications - we subscribe to various daily, weekly and monthly financial & research publications for background in the stock selection process.

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