Luxury of time
When asked about his investment style as a manager, Metcalfe says the way the team approaches assets mirrors its approach to the US, an area in which it has been underweight for the past two years.
“We simply try and avoid certain markets that are expensive relative to history,” he says. “If you invest in a market that has high cyclically-adjusted price/earnings relative to history, over the mid-to-long term your outcome will be poorer than investing in countries or markets with a lower cyclically-adjusted P/E.”
This means the need to adopt a longer-term approach but as a small company, where Metcalfe is the second-largest shareholder, time is something he has on his side.
“As an industry people aren’t often given the time and, as a result, become too short-term,” he says. “I don’t know how many other managers would go underweight, or even short the S&P 500, because they don’t know how long they would be given to underperform before they were fired.
“We will continue to take a longer-term approach, meaning that if markets do keep getting higher, we will get more defensive by raising cash and short-duration bonds as the risk/return profiles deteriorate.”
So, what of the group’s future goals? For Metcalfe, it really is “much of the same”.
“We are not looking for world domination through rapid expansion. If we grew too big, too fast, we would lose what we have from a client relationship point of view.
“We would end up destroying what we have created. We have seen plenty of firms expand too much, and things can go wrong.” While priding itself on back-office support, with returns in its PMS range ahead of the benchmark since launch nine years ago, Iboss is definitely providing a lot of frontend support to its advisers. For example, PMS 4 is up by 156.83% since launch, versus a 124.65% rise in its IA Mixed Investment 4085% Shares benchmark.
He says: “This strong performance and our focus on exceptional service standards are the key factors behind our growth.”
