​About the portfolios

• The Elston Smoothed portfolio ranges have been designed by Elston Consulting
• They are manufactured and managed by Elston Portfolio Management using research, analytics and insights from Elston Consulting.
• For accumulation: the Elston Smoothed Portfolios blend a smoothed fund allocation with a multi-asset portfolio designed to provide smoothed returns with reduced volatility.  There are three risk profiles with 35%, 60%, and 85% look-through equity allocations.  The "ASF" series has been built with Aviva Smooth Managed funds and is available exclusively on the Aviva platform.
• For decumulation: the Elston Smoothed Retirement Portfolios use a "managed three-bucket" based approach, with near-term liquidity, medium-term stability and long-term allocation to a smoothed fund.  There are three risk profiles with 40%, 60%, and 80% look-through equity allocations in the long-term bucket.  The "ASF" series has been built with Aviva Smooth Managed funds and is available exclusively on the Aviva platform.
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The portfolios are designed to provide a managed alternative for advisers wanting to blend a smoothed fund with a multi-asset strategy.  By delivering this in a Managed Portfolio Service (MPS) format, advisers can
1) ensure performance consistency for all their clients and to mitigate risk of portfolio drift
2) ensure any portfolio changes are made on a timely basis
3) deliver good value for money by blending smoothed funds with insitutional share classes
The Managed Portfolio Service provided by Elston Portfolio Management is all-in lower cost than an allocation to a single smoothed fund.

FAQ

Blending smoothed funds with multi-asset portfolios​

Why would I blend a smooth fund with a multi-asset portfolio?

Advisers often take an "all or something" approach to using smoothed funds in their CIRP for certain client segments.  A blended approach provides the "something."  Blending a smoothed fund with a multi-asset portfolio offers a "best of both worlds" solution. It provides the peace of mind of a smooth performance experience with reduced volatility for the more cautious part of a portfolio, while the multi-asset component retains greater potential growth and diversification. This approach is ideal for clients who want to mitigate risk without foregoing the opportunity for upside to their returns, over and above the smoothed growth rate.

Single-platform benefits​

​What is the benefit of holding a smooth fund and a multi-asset portfolio on a single platform?

Holding both components on a single platform provides a consolidated view of the entire portfolio. It allows advisors and their clients to see everything in one place, making it easier to monitor and manage the overall asset allocation, both the individual holdings of a multi-asset portfolio and, crucially, the blend between the smoothed fund and the rest of the portfolio. This simplifies administration and reporting compared to managing separate accounts across multiple platforms providers to achieve the same blending effect.

Cost considerations

Does using a smooth fund alongside a multi-asset portfolio create additional costs?

The cost impact depends on the specific funds and structure used. A key advantage of a managed portfolio service that integrates both elements can be lower overall cost, thanks to managers' access to institutional share classes. The overall cost of the Smoothed MPS, including discretionary management fees, can therefore be LOWER than a standalone smoothed funds, thereby providing good value for money. Furthermore, some off-platform smoothed fund providers use more expensive "mirror funds," which are not needed when using on-platform, direct fund holdings.

Rebalancing and oversight​

How is rebalancing handled between the multi-asset fund and the smooth fund?

In a managed portfolio service, the rebalancing framework is handled efficiently in conjunction with the platform and the smoothed fund provider. This ensures that the intended allocation between the smoothed fund and the traditional multi-asset fund components are managed consistently. Rebalancing of the constituent funds within the MPS is also managed as a standard, streamlined process on the platform, reducing administrative burden and cost for the adviser.

Benefits of a managed approach

What is the advantage of a managed approach for these blended portfolios?

A managed approach delegates the day-to-day oversight of the portfolio to a professional investment manager. This includes making necessary switches and rebalancing, ensuring consistency for an advisers' clients.  This keeps the asset allocation on track, both within the portfolios and for the overall blend between smoothed and traditional fund holdings. This saves the adviser significant time and operational complexity, allowing them to focus on client relationships and high quality financial advice.

Use in accumulation

When to use a smoothed MPS for clients in accumulation?

For clients who are still building their wealth (accumulation), a blended approach offers a convenient blend for a certain segment of clients that are very loss averse.  Advisers are already using a blend of smoothed and multi-asset funds for this segment.  The Smoothed MPS offers this in a more convenient, managed format. It provides the stability and reduced volatility that risk-averse clients seek through the smooth fund portion, while the multi-asset component continues to work towards long-term growth potential. This combination can help clients stay invested during market fluctuations without compromising returns.

Use in decumulation

What are the advantages of using smoothed retirement MPS for clients in decumulation?

For advisers with clients in decumulation, the Elston Smoothed Retirement MPS build on the "managed three-bucket" approach we pioneered and launched in March 2021 (available across all major platforms), to deliver a smoothed version of the same portfolios (exclusively available on Aviva).  For clients making regular withdrawals from their portfolio (decumulation), managing sequencing risk (the value desruction from selling assets during a market downturn) is critical. Incorporating a smoothed fund into the portfolio as the long-term "bucket" can significantly reduce overall volatility. This helps protect the client's pot from severe market drawdowns, making the income more durable and ensuring a smoother decumulation journey.