Discussing True Potential Portfolio performance | The Week in Markets

Added: 2026-05-23

[00:00:09]Good afternoon and welcome back to another week in markets. Delighted to be joined by senior product specialist Mike Thompson to discuss ARC, and that is the performance measurement peer groups for the True Potential portfolios. We now have the latest data in up to the end of Q1 this year, and what a quarter it was.

[00:00:27]So, with a slightly longer-term lens on performance delivery, I'm going to hand over to Mike, who's going to remind us all first of all who ARC are.

[00:00:34]Thanks, Kevin. So, ARC, or Asset Risk Consultants, they provide independent and objective data for assessing portfolio performance.

[00:00:42]Their Private Client Indices, or PCIs, are widely used as risk-based benchmarks and generally give a really really useful view for the competitive landscape across UK discretionary portfolios.

[00:00:54]The indices are structured over four risk profiles, ranging from cautious all the way through to equity risk at the higher end. And their data is based on over 90 contributors with over 2,000 portfolios, including many of the largest names in the industry.

[00:01:08]It's important to note that these figures are net of fees, so they actually reflect what the client experiences. Perfect. So, it's performance delivered for clients after product charges, and it's also a very large data set. Couple of thousand portfolios in that data set to give you a true measure of how we reflect across the wider industry.

[00:01:27]So, Mike, before we delve into the actual peer group rankings, the quartiles, let's just speak about performance delivery over the rolling 12 months through to the end of March this year. Could you just reflect on some of the headline total return numbers for us? Yeah, absolutely. So, looking at portfolio performance over the past five discrete years, there are a couple clear points to highlight.

[00:01:48]Firstly, across all risk profiles, from cautious to aggressive, our portfolios have consistently seen strong outcomes, and especially in the most recent year, With all portfolios outperforming their ARC PCI benchmark. If we just focus in on the balanced portfolio there, so that returned 11.6% versus the ARC balanced PCI that came in at 9% over Q1. Perfect. So, over two percentage points of outperformance relative to the ARC benchmark just for balanced.

[00:02:17]Now, of course, and that those strong numbers cascade through the risk profiles as you said, and it builds on the track records we've built over the years before the last 12 months. Might be worth then just delving into the last year and in particular, as we look at the quartiles and the peer group rankings, let's focus in on Q1 cuz as clients will see on screen that the quartile rankings for Q1 are actually lower than we would have hoped for, but it hasn't really impacted any of the long-term delivery for performance. Lots of ones there longer-term. Focusing on Q1 for us, what caused the impact there?

[00:02:54]Yeah. So, >> [clears throat] >> the start of the year was really good.

[00:02:57]So, January and February we were ahead of the ARC PCIs across all risk profiles, but as we all know in March it was a very challenging month. We had the conflict going on in the Middle East and that caused oil prices to spike.

[00:03:11]Okay, so and as is expected, when there are periods of higher volatility in the markets and where it's equities valuations that fall, typically the two potential portfolios will underperform in the short run, but that long-term delivery isn't impacted.

[00:03:25]And of course, March was volatile period for the the portfolios. And particularly, you'll see it also, it's interesting. Let's just focus in on cautious for a while. We don't often talk about cautious.

[00:03:36]That the quartile rankings there were slightly lower than we would expect. Is that something to do perhaps with bonds versus gold or is it something to do with the peer group construct itself?

[00:03:45]It's I think it's more so to do with the peer group itself. So, it has a much smaller sample size, so it's more effective it's more it's more affected by these large um the limited sample size of results that we get.

[00:03:56]>> Yeah, and of course bonds, which are more heavy and cautious, didn't perform as well as you would expect in a shock for equities, so they didn't necessarily provide a diversification we'd expect to. So, thank you, Mike. What you'll see is that the longer-term track record still remains strong over 1, 3, and 5 years and since inception for those of you who have been with us for a very long time. And of course we should reflect on recent matters, which is that equity valuations have fully recovered from those March shocks, and we've seen new all-time highs in Japan and emerging markets where the portfolios are overweight, and also in the US where of course we have uh asset allocation which is around benchmark there. So, we're very confident that the next set of our numbers will show more green than you see on the screen today.

[00:04:38]So, before we go, it's a huge thank you to all of you who have remained invested in the portfolios. You'll hopefully see those performance numbers coming through in your daily valuations on the app. And with stock markets at new all-time highs, you'll certainly be seeing portfolio valuations near all-time highs as well.

[00:04:54]So, that's all for today. Please join us next week. We'll have more of an economic focus. Please do like and subscribe on the YouTube channel, and please join us after the bank holiday weekend on Tuesday. Thank you. This video is not a recommendation or personal financial advice. With investing, your capital is at risk.

[00:05:11]Investments can fluctuate in value, and you may get back less than you invest.