Do as I say, not as I do: What have advisers done with their own portfolios in the crisis?

Wingate Financial Planning Chartered financial planner Alistair Cunningham has always been a firm believer in active fund management but has toned down his investments over the years.

When global markets tumbled in late March, he rolled the dice and poured the active portion of his own personal portfolio into "distress stocks", such as those linked to oil prices.

"The stuff I hadn't moved to more conventional investments, I switched across to some distress stocks. Arguably all stocks are distressed, but in March BP was particularly because that was the time when we had an oil price war. The oil price fell negative in some sectors and I thought ‘well that's now an opportunity'," he says.

The IFA explains that early in lockdown he directed some of his investments into equities he thought would perform well during the crisis.

"In March I bought Euro tunnel, because I figured a lot more people would be going on the tunnel than would be flying in the short term. I bought Zoom, I've kept Tesla, a couple of computer chip manufacturers I've had for a long time," he says.

In late 2019, Cunningham scaled back the active component of his portfolio from about 80% to between 20 and 30%.

"If I go back to August of last year 100% [of my portfolio] was basically all over the place. As of February this year probably half of that I've moved into much more conventional investments, so basically the same as what we do for our clients, albeit a 10 out of 10 [risk profile].

"As the coronavirus started to bite, I got up to about 70% that's now in the passive portfolio, but the 30% that was around the edge. Probably 70% maybe 80% is my limit to move into these conventional strategies and the remainder took more risk in part."

He says his firm advocates a passive and active approach and those clients who do not have a preference either way are advised to take the passive route.

Part of the reason Cunningham altered the composition of his portfolio was to align his own investments closer to that of his clients.

"You have to go back to the absolute basics - am I well diversified? Is it risk appropriate? Despite everything I said about some of my contrarian holdings, the lion's share of my pot is pretty conventional and well governed," he explains.

"I'm two people - I'm me as an individual and I'm me an adviser. When I'm doing something completely different on my own portfolio to what I'm doing with clients, I realise it isn't right and I've now moved to be much more conventional."

Cunningham reflects on one area where his approach to picking stocks did not pay off, when he sold Amazon and Netflix.

"In August to September last year I started selling down and getting rid of some of my technology stocks and buying more of our core passive strategy. I thought we're ripe for a dotcom bust and was very heavily biased towards tech and I started selling out," he says.

"In hindsight one of the things that's been fairly resilient to coronavirus has been technology. I moved to a strategy that was more conventional for the right reasons, but in hindsight it would have been better if I did nothing [with those stocks]."

Cunningham says his pension pot in June this year was the highest it has ever been, showing his strategy has paid off.

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• Alistair Cunningham
• Dennis Hall
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