Why develop a diversified Fund?

In the many years that Carlton James has been developing opportunities for our shareholders, we have learnt a lot, but one notion always prevails – diversification in investment is key to a successful portfolio. I’m sure many of you will have read articles I have written about diversifying your property or investment portfolio. If you have you will understand how diversifying your portfolio can help to protect your capital and enable you to make decisions in investments that you wouldn’t usually be able to. This equates to higher returns whilst maintaining a reduced risk.

Our group wanted to use this ethos to mold the company's efforts. We have lost much in the past through lack of diversification and did not want this lesson to go unlearned. Alas the Carlton James Diversified Alpha Fund was born. A brain child of this notion.

The fund is designed to protect its shareholders against macro-economic issues that are out of control of the company or themselves. You see, in a world of increasing connectivity the butterfly effect is heightened. What happens in one country has both a direct and indirect impact on another. The collapse of a nation’s economy can hit the pockets of other countries across the world. These issues are a constant threat to any investor.

For example, the 2008 economic crisis started in the U.S. and hit Dubai very badly, while the most recent oil crisis and the advances in fracking technology hit many countries across the globe due to oversupply. Brexit is and will continue to hit European countries, which in turn will hit trade with countries like the U.S. Trade conflict between US and China and continued conflict in the Middle East has impacted Europe too. Of course, if you go back enough you will see the cause of such events having a deeper root in other countries too. The endless economic link can be traced thousands of years into the past.

Understanding these economic factors should give us the tools required to invest in such a way so as to be as close to recession-proof as possible.

Economies work in cycles. As does the human race. We unfortunately as a race do not learn from the mistakes of our forefathers, especially from an economic standpoint. When there are problems in any one region the knee jerk reaction is to sell. As many experts will tell you, if it has happened then it is already too late. Holding is the key to long term prosperity.

A diversified strategy means that Carlton James can utilise security in different asset classes and jurisdiction to be able to slow or increase their investment in different countries and sectors depending on market conditions.

With this model in place The Carlton James Group uses Diversification to essentially recession proof their offerings.

Simon Calton, Co-Founder and Chief Executive Officer, Carlton James