The issue is easy to explain. Rooney is, with some justification, our best player and talisman. Hodgson’s problem, however, was that his best position was arguably better filled by another player, Danny Welbeck. So how, given that situation, could he have adjusted the rest of the formation to accommodate him in the team and hopefully got a better result?

For England’s opening game against Italy, the solution had been to play him out of position on the wing in order to achieve this. The result was far from convincing, with Rooney largely uninvolved for most of the game. Should, some ask, we simply have excluded Rooney and put a proper winger on in his place? Would the team have been better if our best player hadn’t been in the team at all?

Tactical formation

This problem of how to build the best ‘sum-of-parts’ plagues us in portfolio construction too. Being part of a large asset manager with significant depth, we are often provided with great investment ideas from various fund managers that make sense in themselves, though not within a multi-asset portfolio. Like a football team, building a portfolio is not about collecting the best parts and putting them together, trying to find a way to accommodate them all.

Instead, it is about producing the best overall portfolio from all the available parts, which may or may not be the top parts. There are plenty of investment ideas that make sense but which are not included in portfolios. The most common reason for this being that the benefit is already provided by an existing investment.

For example, commodities are unlikely to add much to a portfolio that already owns emerging-market equities. Both are largely driven by the same underlying factor, namely growth in emerging markets. Each idea, though valuable by itself, should only go into the portfolio if it brings something different.

Specifically, each position – and, more importantly, how they work together – must be carefully examined within the overall context of the portfolio. This, in turn, depends on how the different positions are supposed to react to different challenges, with positions hopefully helping to limit or at least offset the loss from others during negative periods, boosting returns when necessary.

In football, the best modern teams have both an underlying playing philosophy and the ability to respond to different challenges within this philosophy. Such as it should be with portfolio management, with each position working with the rest to deliver overall client requirements (whether returns, income, volatility or something else) while still being able to respond to a changing market environment.

The French formula

The French team played Honduras the day after the England game. Despite a well organised and time honoured attempt by the Hondurans to frustrate them, France romped home to an easy victory. On the field Karim Benzema and Paul Pogba were fantastic, and France were the deserved winners. Notably absent from the French World Cup squad though was Sami Nasri, a skilled attacking midfielder. When his shock exclusion from Les Bleus was announced, the French coach Didier Deschamps responded simply that he had “picked the best team, not the best players”.

I’m with the French on this one. Which may be why there’s been more “Allez Les Blues” than “Come on England” in this tournament. Maybe next time?

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