Clive Koffman, 44, describes himself as an active investor. Clive, who works as an asbestos surveyor in Manchester, is looking to build more extensive retirement savings. To this end, he opened a self-invested personal pension (Sipp) with AJ Bell last year in order to take advantage of the tax relief available.
He has been an investor for the past five years and over this time has invested in a mix of funds, bonds and direct equity holdings.
More recently, Clive has tended to focus on low-cost funds. He says: “I have lost money in the past by investing in random companies and not doing my homework by looking into things properly.
“I am now of the opinion that shares are best left to the professionals. This is why I’ve decided to focus more on funds, and let the managers decide where to invest the money.”
Clive favours funds with lower charges. As he buys and sell funds regularly he doesn’t want to be paying higher upfront fees, as this will make this strategy uneconomic.
When it comes to investment styles, Clive describes himself as "a bit of a chartist", studying the performance of any fund and the region it is invested in and using the information to decide when to buy and sell holdings.
He explains: “By looking at charts, I am able to decide when it is best to invest. If the fund has gone down to a low point on the chart, that’s when I’d normally invest.”
While many investors stand by the old investment adage that it is time in the market, not timing the market that counts, Clive disagrees: “I buy and sell funds on a regular basis. To me its all about buying and selling at the right time. The fact that AJ Bell has relatively low fees for doing this makes it easier.
“I will sell a holding as soon as I think it has gone up as much as it possibly can, sometimes selling within two weeks of investing in the fund if I feel it has gone up substantially.”
Clive says that this strategy has worked well for him to date but to lower the risk he is careful not to invest large amounts in any one holding, limiting his investments to between £500 and £1,000 per fund.
At present, Clive is avoiding investments in either the UK or Europe, prefer Asia, North America and Latin America where he believes there a greater opportunities. He invests in the Fidelity America, Neptune Latin America and Neptune India funds.
Fidelity America has a Bronze medal rating from Morningstar and a three star rating. Morningstar analysts point out that despite a recent blip in performance, the fund continues to be a “compelling option” for investors with a number of positive attributes including a talented manager in Angel Agudo, who is backed by a well-resourced analyst team.
Clive points out that it is this sort of “performance blips” that offer opportunities for investors like him to buy into funds that have a good long-term track record at a relatively low price. According to Morningstar figures, the fund has delivered annualised returns to investors of 11.5% over the past five years.
Neptune Latin America has a five star rating from Morningstar, demonstrating its strong performance over the past three years against both its benchmark and peers. The fund, which is managed by Thomas Smith, has delivered total annualised returns to investors of 12.5% over the past three years. It has also performed well over thelong-term, although has not delivered these double digit returns. According to Morningstar data, it has produced total annualised returns of 5.6% over the past decade.
The picture is slightly different with Neptune India, which has just a two-star rating from Morningstar. This reflects the fact that its performance has also dipped below its benchmark recently. The fund, which is managed by Ewan Thompson, has a better long-term track record though, producing annualised returns of 6.7% over the past five years. However, it is down 9.8% year to date.
Clive, who lives with his wife in Manchester, likes to spend his spare time researching and reviewing his investment portfolio. He splits his investments, between a Sipp, Isa and various fixed-bond accounts, preferring not to keep all his eggs in one basket. He says cash and fixed-bond accounts provide a bit more security, even if the returns are lower.
While the current economic outlook gives Clive some cause for concern, with many investors fearing a recession is on the way, he is not altering his investment portfolio or his strategy as a result: “If Brexit happens I don’t think it will have too much of an effect on holdings in Asia and Latin America.
“I’m worried about climate change, but I don’t think this will change the way I invest either At the end of the day, I just have to get on with investing for our future.”
