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Investment Process

Click here to see a PDF diagram of our investment process

Our goal is to maximise the value of our clients’ portfolios within agreed parameters. Risk and return and the trade-off between the two is at the heart of the AES 7-Step Investment Process.

After identifying the investable securities from a huge potential universe, we order them into recognised asset classes and rank them. AES has the ability and freedom to invest in most securities across the globe. Unlike many firms in the industry, Albert E Sharp is independent with no cross shareholdings, corporate finance department or in-house funds which creates an environment of free-thinking.

Next, we analyse the various risk, return and cross correlation statistics. Guided by this quantitative analysis we then apply a more forward-looking, qualitative overlay, based upon the AES Investment Committee’s macro-economic view. This forms the basis of an asset allocation framework using a 1-10 risk scale. We check industry-standard benchmarks and risk-profiling guides and amend accordingly in order to create a practical working model. This top-down approach is revisited by the team periodically at investment meetings and because it forms the long-term strategic view, significant changes tend to be infrequent. Our research is conducted using a wide variety of sources including raw data from Bloomberg® and primary research from leading international institutions.

A more dynamic aspect of the process occurs at the security selection stage. Here we populate the allocation framework with equities, fixed-income securities, funds or a combination. For model portfolios these tend to be entirely fund-based and drawn from the AES Approved Fund List, which reflects the research undertaken by members of the investment committee.

The next two steps involve evaluating correlations, applying short-term tactical trading views (where relevant) and testing to see the outcomes of hypothetical events. The output is a range of optimal portfolios. Due to an ever-changing world, the final three steps are continually reassessed, reworked and formally reappraised at weekly in-house investment meetings.

With a first-class team, supported by the best of breed technology, this disciplined, robust investment process is one of the key differentiating factors between AES and its peers. The AES investment team has expertise in fund management, stockbroking, and research gained at some of the City’s leading institutions; most partners have over 20 years’ experience.