We’re looking at cash again. I know this can be a pain for you when dealing with clients: They’ve had their heads turned by the promise of a 5% volatility-free return and now can’t think of anything else.  

And you know what? That’s annoyed me. It’s unfair on you; their adviser. So you can call the next few minutes therapy if you like, because I’ve put together a few charts and a neat movie-based analogy that add up to a rant about this unhelpful attitude. 

What’s the movie? 

Gone With the Wind. I watched it again recently, and it really reminded me of this client cash-love dynamic. 

If you haven’t seen it, it’s a sprawling epic of a story, centred on Scarlett O’Hara. She’s obsessed with her childhood love, Ashley Wilkes, who is – initially – handsome, wealthy and reliable, but, sadly for her, engaged to someone else.  

She ends up instead with Rhett Butler. He’s wealthy too, but also roguish, volatile, and has a whole George Clooney thing going on.  

It’s clear (to everyone but her) that Rhett’s a better match for Scarlett than Ashley ever was, but she remains obsessed with her first love. This despite building a family with Rhett, and Ashley being broken by the war. This nostalgia-driven obsession means that, at the first sign of Ashley returning her interest, she embraces him, even though he’s a shadow of his former self. 

It’s at this point you want to shake Scarlett by the shoulders and tell her to get a grip. What does she see in him?! 

Only when Rhett finally storms off (with the iconic mic-drop moment: “Frankly my dear, I don’t give a damn!”) does Scarlett realise she’d been better off with Rhett all along. 

OK, let’s replace those characters with our own versions: So Scarlett O’Hara is now played by your clients; Ashley Wilkes is replaced by cash (“Cashley” from here on in – I thank you), while Rhett Butler can be played by any market-based investment, but for this letter he’s a balanced multi-asset fund (in the ballpark of the classic 60-40 equity-bond split portfolio). 

Here’s the parallel scenario: Many moons ago your clients’ younger selves fell in love with the reliable, money-making Cashley Wilkes. However, at the onset of terrible times (the Global Financial Crisis) they were forced into the arms of a more volatile offering: A multi-asset portfolio, whose price, unlike Cashley’s, roguishly rises and falls with the markets’ mood. And so, as a consequence, does their relationship with it. 

It’s clear to everyone (but your clients) that multi-asset funds have been far better for them than Cashley, yet they remain obsessed with their first love. This despite building some decent returns with multi-asset portfolios over the last 15 years and Cashley being broken by the financial crisis. This nostalgic obsession meant that, at the first sign of him returning their interest in 2023, they embraced Cashley (dumping their multi-asset portfolios as they did so). 

If this description is fair, it’s clear they need a good shoulder shake. What do they see in him?! 

Is it fair though? 

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Written by Simon Evan-Cook, Fund Manager, VT Downing Fox Funds

If you'd like to subscribe to receive updates from Simon email downingfundmanagers@downing.co.uk

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