ARIA CAPITAL MANAGEMENT

Summary

ARIA Capital Management is a trading name of Absolute Return Investment Advisers (ARIA) Limited, authorised and regulated by the Financial Conduct Authority (FCA). The firm has offices in Guildford in the UK, as well as international offices in Dubai, Malta and Cayman Islands. 

ARIA Capital Management offer their professional investment management services to individuals (in contrast to many competitors who will only use financial advisers as sales intermediaries).

Although the personal service is offered, ARIA still recommends working in conjunction with advisers.  

> UK-based

> Small fund business with limited resources to manage various complex investment strategies.

> Chequered history.

> Their active investment methodology is questionable.

> Expensive DFM service for what you get.

The DFM Service

ARIA Capital Management mainly tries to sell their DPM (Discretionary Portfolio Management) services to international professionals using two key points:

1. Time (saves you time)

2. Risk (manages your investments as per your risk appetite)

Points to note:

  • ARIA Capital Management use building block funds rather than buying specific equities, which they claim reduces costs for all portfolio sizes (brokerage fees). However, costs of underlying funds may still be significant compared to alternatives.

  • ARIA Capital Management’s claims, as part of its core philosophy in absolute return investing, to utilise alternative investments such as hedge funds and structured products in portfolios.

  • They have their own funds which is used as part of the ‘building blocks’ strategy of which some are alternative products including commodities or structured products and some are more traditional.

 

Regarding ARIA’s belief in alternative investments it is stated, “We seek to find investments which are not solely reliant on stock markets going up in order to generate positive returns”.

 

This translates as follows; ARIA believe that they can analyse and understand which geographies and asset classes are undervalued and that they can make alternative investments e.g. not linked to the standard S&P 500 or FTSE 100.

 

A wealth of evidence over the years suggests that outperforming the combined wisdom of even the secondary markets in less commonly traded assets is highly unlikely.

Other risks in alternative investments are also left unaddressed in the company’s literature. However, the ‘safer’ investment portfolios do include ETFs (Exchange-Traded Funds) which can be low cost and generate the best returns in the long run if managed correctly. 

Costs

 

Annual Management charges for ARIA’s DFM service are 1% per annum, but ARIA state that this depends on “service line chosen”, so it could be higher.

Additional charges may apply where they are requested to pay your financial adviser for their work in reviewing the portfolio’s performance and providing an independent review of “how we are doing” for example.

The underlying funds within the portfolio will also levy fees, a portion of which will be paid to ARIA. These fees will be around 1.5%.

Dealing charges arise each time an investment is bought or sold. In minimising these, ARIA cap them at 1% or £50, whichever is lower. 

All in, you can expect to be paying between 2.5% and 3.5% per annum, and possibly more.

Final Verdict

ARIA Capital Management is a small fund management business. When using their DFM service, you could be paying a lot more than you think. Many unqualified an inexperienced offshore advisers like to use this option when they are unaware of other more suitable options. Many advisers may also use ARIA's DFM or individual funds so they can add extra charges and pocket more commission.

Further, the performance of some of ARIA's funds are questionable. Their absolute return focus is not represented in their investment returns and much better funds exist in the absolute return investment universe.

We would stay away from investing through ARIA Capital Management and believe more suitable options exist.

Himalaya

Get in touch

Whether you need a second opinion, want to find a qualified adviser, or just have some questions, Expat Money is here to help.

We'll call or email, learn about you and take you through your options.