Quality First in Long-Term Wealth Management
January 2026
In today’s investment landscape, clients are continually exposed to new ideas, narratives, and trends. Index-only advocates promise simplicity and low cost. Star stock pickers promise insight and outperformance. Media noise and conversations in social circles reinforce both extremes. For wealth owners, especially those stewarding family capital, this creates pressure to react, optimise or chase the latest idea.
At Waugh McDonald, we take a different view. Long-term success comes from discipline, structure, governance, preparation and behavioural clarity. Not prediction. Not reacting. Not chasing. Quality first, outcomes second.
Our fiduciary responsibility
We see wealth management as a responsibility that extends far beyond returns. Our role is stewardship that protects and grows wealth across generations. This requires regulated, qualified, evidence-based professional management, supported by transparent processes and robust oversight. Clients trust us to act in their best interests and we honour that trust by prioritising clarity, discipline and behavioural guidance.
We do not pursue performance for its own sake. Our job is to help clients avoid permanent capital loss, avoid short-term decision making and avoid approaches that compromise governance.
The Waugh McDonald Morningstar Wealth approach
We partner with Morningstar Investment Management Europe Ltd, an FCA-authorised and regulated discretionary manager based in the United Kingdom.
The UK Financial Conduct Authority is one of the most respected and stringent investment regulators globally. Working with an FCA-regulated institutional manager ensures an unusually high standard of governance, oversight and client protection.
Morningstar brings:
Global institutional-grade research
Team-based investment decisions
Documented risk controls
Evidence-based portfolio construction
This removes key person dependency, delivers continuity across generations and mirrors how the world’s leading sovereign wealth funds and pension funds construct and oversee portfolios.
Importantly, Morningstar’s global managed portfolio ranges have consistently outperformed peer group averages over meaningful timeframes. This is not because they attempt to predict markets, but because disciplined, rules-based, valuation-aware processes consistently add value over time.
Our investment framework is built on three foundations:
Diversification
Exposure across regions, sectors, currencies and asset classes reduces concentration risk and helps turn volatility into long-term opportunity.
Rules-based rebalancing
Assets are adjusted through valuation discipline and systematic methodology. This supports rational buy-low, sell-high behaviour and prevents emotional decision-making.
Governance
Governance is the framework that keeps decision making disciplined, consistent and aligned with long-term goals. Managers, advisers and where appropriate trustees, provide structured oversight. This ensures that investment decisions follow agreed policies rather than emotion, that risks are understood and controlled and that the portfolio remains anchored to purpose across generations. Good governance also creates accountability, prevents ad hoc or reactive changes, and protects clients, whether individuals or families, from the behavioural and structural risks that often derail long-term wealth.
Comparing our highest equity allocation with two stylistic extremes
Clients often encounter two dominant global equity narratives.
One is the fully passive, fully diversified global index, represented here by MSCI ACWI.
The other is concentrated, high-conviction stock picking, represented by Fundsmith Equity Fund and Lindsell Train Global Equity Fund.
These approaches sit at opposite ends of the spectrum. One relies fully on market capitalisation rules. The other relies on a manager’s personal conviction and concentrated selections.
Our highest equity allocation, the Waugh McDonald Adventurous Growth Portfolio, sits between these extremes. It carries similar levels of global equity exposure but does so with:
Diversified building blocks
Valuation discipline
Rules-based rebalancing
Team oversight
Explicit risk controls
This creates a like-for-like comparison of the three primary ways investors access global equities.
Even as our highest equity allocation, the Adventurous USD Portfolio typically shows lower volatility than the two stylistic extremes because it avoids concentration and follows systematic rebalancing.
Why USD data is used
We manage both GBP and USD portfolios. For this comparison:
MSCI indices use USD as their primary reference currency.
Fundsmith and Lindsell Train publish USD performance.
Using one currency avoids distortions caused by FX movements.
This keeps the comparison clean and focused on process rather than currency noise.
What MSCI ACWI and the two active funds represent
MSCI ACWI
MSCI ACWI is one of the most comprehensive global equity indices. It includes:
23 developed markets
24 emerging markets
more than 2,800 companies
It is widely used as the global equity benchmark by institutional investors.
Fundsmith Equity Fund
A concentrated global equity fund that focuses on high-quality global companies, strong cash generation and durable business models. It is known for low turnover, long holding periods and significant active conviction.
Lindsell Train Global Equity Fund
Another concentrated global strategy, focused on intellectual property-rich businesses, customer loyalty, and long-term competitive advantages. It is also characterised by low turnover and high conviction.
These three funds represent concentrated stock picking. MSCI ACWI represents fully passive diversification. Our Adventurous USD Portfolio sits between them with disciplined, risk-aware global exposure.
Behavioural finance is the real differentiator
Decades of research and practical experience show that behaviour drives outcomes far more than timing or stock selection.
Our approach is specifically designed to help clients avoid predictable behavioural traps:
Loss aversion encourages selling after declines. Rebalancing enforces rational behaviour.
Overconfidence encourages concentrated bets. Diversification controls risk.
Recency bias encourages performance chasing. Valuation and policy anchor decisions.
Confirmation bias narrows thinking. Team oversight broadens perspective.
Narrative capture pulls investors into thematic fads. Governance restores clarity and purpose.
The greatest risk to long-term wealth is not markets. It is the behaviours triggered by markets. A structured, policy-based approach protects clients from these risks.
Being well prepared is the foundation of long-term success
Prepared clients outperform reactive clients. Not because they forecast better, but because they operate within a disciplined and intentional structure.
Preparation means:
Having clear investment policies
Establishing rebalancing and decision rules
Understanding liquidity and cash flow
Defining trustee and adviser roles
Managing concentration risk in advance
Mapping structures, beneficiaries, and timelines
Aligning portfolios with long-term goals and values
Preparation removes emotion, provides clarity, and gives clients resilience during uncertain times. It is far more effective than reacting to news or trends.
Understanding index exposure
Index investing gives exposure to the methodology, not to individual companies. Tesla, for example, appears only in proportion to its index weight. Weights change automatically with market capitalisation and index rebalancing. This self-adjusting mechanism prevents concentration risk without requiring prediction or subjective judgement.
Performance and outcomes
Although performance is not our starting point, it validates process. Over the past four years, our Adventurous USD Portfolio has delivered strong and consistent outcomes while the two stylistic extremes experienced higher volatility and, in the case of stock pickers, extended periods of lag.
Four-year performance comparison
USD portfolios, 2022 to 2025
Year 2022 2023 2024 2025 Cumulative
Waugh McDonald
Adventurous Growth -15.23% +20.54% +15.75% +23.34% +51.77%
Portfolio (USD)
MSCI World Index -17.73% +24.42% +19.19% +21.60% +48.40%
(USD)
Fundsmith Equity -21.92% +17.54% +6.93% +7.95% +6.06%
Fund (USD)
Lindsell Train Global -14.58% +12.52% +11.72% +6.52% +14.38%
Equity Fund (USD)
Data sourced from Morningstar and MSCI. USD basis used for consistency.
Our perspective
For core portfolios, the evidence is consistent. Professional, regulated management combined with disciplined governance, preparation, global diversification, behavioural clarity and a quality-first process produces resilient long-term outcomes.
The best way to protect and grow long-term wealth is not to chase what is new, but to stay anchored to principles that endure. At Waugh McDonald, we put quality first and allow results to follow naturally from that commitment.
If you’re seeking a disciplined, evidence-based approach to managing and protecting wealth across generations, connect with Waugh McDonald at info@waughmcdonald.co.ke
.jpg)
