Inflows into flagship Copia Select accelerate

Head of Copia Henry Cobbe

Head of Copia Henry Cobbe

Copia Capital Management, the discretionary investment management platform, has just passed the three-year anniversary of its flagship ‘off-the-shelf’ Select range, which uses a number of ETFs to express an actively managed asset allocation view.

While the business was launched in 2013, inflows to the service are finally starting to accelerate, and now stand at around £390m.

Henry Cobbe, head of Copia, attributes this to three main factors, which he described as some “tectonic shifts” across the UK asset management space.

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These include the “institutionalisation of retail”, with a greater focus being placed on evidence-based investing and high-quality investment processes.

The second shift is in technology – in Copia’s case this pertains to both the platform technology underpinning its managed portfolio service (MPS) and the data technology used increasingly for assessing investment markets.

“We have been running our proprietary quantitative model, the Copia Risk Barometer, since 2013,” said Cobbe. 

A weekly-published take on the markets, the risk barometer uses a red, amber and green measure of risk, based on a set of data points such as equity and bond valuation levels, interest rates, a look at the yield curve and the gold and oil price among others.

“If technology enables smoother, more comfortable car journeys, why not use it for financial markets as well?”

He added: “While all these data points exist in the Financial Times, for example, no manager could read and fathom the impact of every data point every day.”

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The third factor he said, is the “growing acceptance of index investing as a reliable alternative to active”.

Cobbe said: “That has been a process that has happened anyway in the institutional markets and was gaining traction in the retail market, but with the problems thrown up by high-profile bond funds gating, high-profile property funds gating and – more recently, a high-profile equity fund gating, there is a fresh interest in looking at funds that are diversified, transparent, liquid and low cost.”

Currently [at end October], the risk barometer is at ‘green’, which Cobbe said indicates a more risk-on posture in terms of asset allocation.

If it was sitting in the amber zone, that would suggest a risk-neutral stance or “a mid-point”, while red would mean the minimal end of the risk spectrum.

Rejecting the suggestion that ETFs only deliver in rising markets, Cobbe said the main drivers behind their ‘risk-on’ view, or green zone view at the moment, include a sharp improvement in equity market sentiment of late, ongoing tensions around the US-China trade relationship, the Federal Reserve’s shift to a rate-cutting stance and the tightening of credit spreads.

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Cobbe said: “At the end of September, we were in the amber zone. In July we are around the green zone. Now we are back in the green zone and we are comfortable with the current market outlook.

“While we publish every week we obviously do not rebalance on a weekly basis.”

“If technology enables smoother, more comfortable car journeys, why not use it for financial markets as well?”

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He said while many institutional managers might use such a data-led model, he felt it was less common in the retail discretionary space.

That said, Cobbe also prefers not to refer to Copia as a “traditional discretionary manager”, instead referring to his business as an “investment solutions team”.

Copia also runs the Select Plus, Volatility Focus, Retirement Income and Specialist Beta ranges of portfolios, suitable for clients to move throughout the accumulation to decumulation lifecycle.



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